HRB FINAL EXAM(ACTUAL EXAM) WITH
CORRECT ACTUAL QUESTIONS AND
CORRECTLY WELL DEFINED ANSWERS
LATEST ALREADY GRADED A+ 2026
Under what circumstances are tips not subject to social
security and medicare taxes? - ANSWERS-Tips totaling less
than $20 in a calendar month are not subject to these taxes.
Also, if the taxpayer has already paid the maximum social
security tax for the year, further tips are not subject to social
security tax.
Under what circumstances is Form 4137 prepared? -
ANSWERS-Only if the taxpayer did not report tips to his
employer as required, or if he is reporting allocated tips.
What form is used to report household employment taxes? -
ANSWERS-Schedule H, Household Employment Taxes is filed
to report household employment taxes paid. The calculated
amount is then carried to Form 1040, line 59.
,What happens if an individual is a qualifying child for more
than one taxpayer? - ANSWERS-The taxpayers may decide
among themselves who will claim the credit.
How does one determine the taxable income of the
taxpayers who itemize deductions? - ANSWERS-Adjusted
gross income (AGI) minus total itemized deductions and
total exemptions. (
Why is it important to distinguish qualified home mortgage
interest from personal interest? - ANSWERS-Mortgage
Interest is deductible, Personal Interest is not.
Is the cost of items purchased to benefit a charitable
organization deductible, for example, ballet tickets to raise
money for a non-profit hospital? - ANSWERS-Only the
amount paid in excess of the value of the item is deductible.
Are scholarships and fellowships taxable? - ANSWERS-"• If a
W-2 is received it is FULLY taxable. • Amounts to Non-
degree candidates are FULLY taxable and reported on Line 7
marked ""SCH""
,• Amounts to Degree candidates spent for qualified
expenses are NOT taxable. "
Under what circumstances are gross gambling winnings
taxable? - ANSWERS-Always. Gambling losses may be
deductible up to the amount of winnings.
What document will the taxpayer receive from their
employer reporting their disability pension? - ANSWERS-
1099R
How can a disability pension qualify as earned income for
the EIC? We've learned pensions are not earned income. -
ANSWERS-Before the taxpayer reaches minimum retirement
age, it's considered earned income
Under what circumstances would a pension be partly
taxable? - ANSWERS-When it's funded through employer
plans to which the employee contributed some after-tax
money.
Where is income tax withheld from a pension or IRA
distribution reported on the tax return? - ANSWERS-Form
1040 Line 61
, What does it mean to depreciate an asset? - ANSWERS-To
reduce the basis of a business asset allowing for the
reasonable wearing out over a period of years.
What kind of property is depreciable? - ANSWERS-Business-
use property with a useful life of more than one year.
Ho do we determine the MACRS recovery period of a piece
of personal property? - ANSWERS-By using the Table of
Asset Class Lives and Recovery Periods
For MACRS purposes, we need to divide real property into
two categories. What are they? - ANSWERS-Residential and
Nonresidential
How is residential real property, such as a rental house or
apartment building, depreciated under MACRS? - ANSWERS-
Using a straight-line method over 27½ years.
What are some examples of listed property? - ANSWERS-"•
Most passenger automobiles under 6,000 pounds and any
property used for transportation.
CORRECT ACTUAL QUESTIONS AND
CORRECTLY WELL DEFINED ANSWERS
LATEST ALREADY GRADED A+ 2026
Under what circumstances are tips not subject to social
security and medicare taxes? - ANSWERS-Tips totaling less
than $20 in a calendar month are not subject to these taxes.
Also, if the taxpayer has already paid the maximum social
security tax for the year, further tips are not subject to social
security tax.
Under what circumstances is Form 4137 prepared? -
ANSWERS-Only if the taxpayer did not report tips to his
employer as required, or if he is reporting allocated tips.
What form is used to report household employment taxes? -
ANSWERS-Schedule H, Household Employment Taxes is filed
to report household employment taxes paid. The calculated
amount is then carried to Form 1040, line 59.
,What happens if an individual is a qualifying child for more
than one taxpayer? - ANSWERS-The taxpayers may decide
among themselves who will claim the credit.
How does one determine the taxable income of the
taxpayers who itemize deductions? - ANSWERS-Adjusted
gross income (AGI) minus total itemized deductions and
total exemptions. (
Why is it important to distinguish qualified home mortgage
interest from personal interest? - ANSWERS-Mortgage
Interest is deductible, Personal Interest is not.
Is the cost of items purchased to benefit a charitable
organization deductible, for example, ballet tickets to raise
money for a non-profit hospital? - ANSWERS-Only the
amount paid in excess of the value of the item is deductible.
Are scholarships and fellowships taxable? - ANSWERS-"• If a
W-2 is received it is FULLY taxable. • Amounts to Non-
degree candidates are FULLY taxable and reported on Line 7
marked ""SCH""
,• Amounts to Degree candidates spent for qualified
expenses are NOT taxable. "
Under what circumstances are gross gambling winnings
taxable? - ANSWERS-Always. Gambling losses may be
deductible up to the amount of winnings.
What document will the taxpayer receive from their
employer reporting their disability pension? - ANSWERS-
1099R
How can a disability pension qualify as earned income for
the EIC? We've learned pensions are not earned income. -
ANSWERS-Before the taxpayer reaches minimum retirement
age, it's considered earned income
Under what circumstances would a pension be partly
taxable? - ANSWERS-When it's funded through employer
plans to which the employee contributed some after-tax
money.
Where is income tax withheld from a pension or IRA
distribution reported on the tax return? - ANSWERS-Form
1040 Line 61
, What does it mean to depreciate an asset? - ANSWERS-To
reduce the basis of a business asset allowing for the
reasonable wearing out over a period of years.
What kind of property is depreciable? - ANSWERS-Business-
use property with a useful life of more than one year.
Ho do we determine the MACRS recovery period of a piece
of personal property? - ANSWERS-By using the Table of
Asset Class Lives and Recovery Periods
For MACRS purposes, we need to divide real property into
two categories. What are they? - ANSWERS-Residential and
Nonresidential
How is residential real property, such as a rental house or
apartment building, depreciated under MACRS? - ANSWERS-
Using a straight-line method over 27½ years.
What are some examples of listed property? - ANSWERS-"•
Most passenger automobiles under 6,000 pounds and any
property used for transportation.
