H&R Block Income Tax Course
Questions with Accurate Answers
2 Requirements for Moving Expenses correct answer (1) Distance
(2) Work time
401(k) Plan correct answer Deferred compensation plan available through a wide
range of employers. Contributions to a 401(k) plan are tax deferred to the
employee. Distributions from the plan are taxed as ordinary income to the
recipient when received.
403(b) Plans correct answer A tax-advantaged retirement savings plan available
for employees of: public education organizations; some non-profit organizations;
cooperative hospital service organizations.
A 1988 US Series EE Bond, cashed in this year. Election to report interest annually
has not been made. Taxable? correct answer Yes
Adjusted Basis correct answer The original basis PLUS the cost of improvements;
the cost of restoration after a casualty; assessments for local improvements
MINUS any discount, rebate, or reimbursement of any portion of the purchase
price; insurance reimbursements for property damages; the amount of casualty
or other losses deducted on the return for any year; depletion or depreciation
allowed or allowable; any gain that is not reported in the year realized.
Adjusted Gross Income correct answer Equals gross income less reductions that
are allowable, regardless of whether personal deductions are itemized.
,Adoption Credit correct answer A nonrefundable credit for qualified adoption
expenses incurred for each eligible child. The credit cannot exceed $13,360 per
child. The limit is a per-child limit, not an annual limit, and can be carried forward
for up to five years or until used.
Age of a Qualifying Child correct answer Under 19 at the end of the year and
younger than the taxpayer; A full-time student under 24 at the end of the year
and younger than the taxpayer; Permanently and totally disabled.
Age Test for QC correct answer (1) Under 19 and younger than taxpayer. (2) Full-
time student under 24 and younger than taxpayer. (3) Permanently and totally
disabled.
Alimony and separate maintenance payments included in gross income? correct
answer Yes
Alimony Payments correct answer Payments made by one spouse to the other
spouse or former spouse under a written separation or divorce instrument.
Amended Return correct answer A tax return filed on Form 1040X after the
original return has been filed.
American Opportunity Credit (AOC) correct answer Credit for qualifying education
expenses available for tax years 2009 through 2012. The AOC may be partially
refundable.
Amount of Adoption Credit correct answer Up to $13,360 per eligible child.
,Amount of Child Tax Credit correct answer $1,000 per child.
Amount of the Lifetime Learning Credit correct answer 20% of the total qualified
expenses for all eligible students on the tax return.
Annuity correct answer A series of payments under a contract made at regular
intervals over a period of more than one year.
Are funeral expenses deductible? correct answer No
Are gambling losses deductible? correct answer Only to the extent of winnings
reported as income.
Are gambling winnings taxable? correct answer Yes
Are tax preparation fees deductible? correct answer Yes
Basis correct answer A measure of the taxpayer's investment in property for tax
purposes.
Beneficiary correct answer The owner or recipient of funds in an account, such as
an IRA, or from an insurance policy or will.
Calculating the AOC correct answer The amount of the AOC is the sum of: 100% of
the first $2,000 of qualified education expenses paid for the eligible student; 25%
of the next $2,000 of qualified education expenses.
, Camille (16) was claimed by her mother, Ida, and her father, Walter. Camille lived
with each parent an equal amount of time in 2011. Ida's AGI was $44,255.
Walter's AGI was $47,525. Who can claim Camille's dependency exemption?
correct answer Walter
Can a taxpayer who may be claimed by another person on their return claim a
dependent? correct answer No
Can the 1040X be e-filed? correct answer No.
Capital Gain Distributions correct answer Amounts paid by mutual funds,
regulated investment companies, and real estate investment trusts.
Carl and Carrie are married. Carol is their qualifying child. No one can claim Carl or
Carrie on their tax return. Carol is married to Paul. Neither Carol nor Paul is
required to file a tax return. Neither would have a tax liability if they filed
separately. Carol had no income. Paul is filing a joint return with Carol only to
claim a refund of the tax withheld. Carl, Carrie, Carol, and Paul are all US citizens.
Can Carl and Carrie claim Carol as a dependent? correct answer Yes
Cassandra is single. Her son, William (3), lived with her for all of 2011. William had
no income. Qualifying child or relative? correct answer Qualifying Child
Certain foster care payments included in gross income? correct answer No
Certain income from the discharge of indebtedness included in gross income?
correct answer Yes
Questions with Accurate Answers
2 Requirements for Moving Expenses correct answer (1) Distance
(2) Work time
401(k) Plan correct answer Deferred compensation plan available through a wide
range of employers. Contributions to a 401(k) plan are tax deferred to the
employee. Distributions from the plan are taxed as ordinary income to the
recipient when received.
403(b) Plans correct answer A tax-advantaged retirement savings plan available
for employees of: public education organizations; some non-profit organizations;
cooperative hospital service organizations.
A 1988 US Series EE Bond, cashed in this year. Election to report interest annually
has not been made. Taxable? correct answer Yes
Adjusted Basis correct answer The original basis PLUS the cost of improvements;
the cost of restoration after a casualty; assessments for local improvements
MINUS any discount, rebate, or reimbursement of any portion of the purchase
price; insurance reimbursements for property damages; the amount of casualty
or other losses deducted on the return for any year; depletion or depreciation
allowed or allowable; any gain that is not reported in the year realized.
Adjusted Gross Income correct answer Equals gross income less reductions that
are allowable, regardless of whether personal deductions are itemized.
,Adoption Credit correct answer A nonrefundable credit for qualified adoption
expenses incurred for each eligible child. The credit cannot exceed $13,360 per
child. The limit is a per-child limit, not an annual limit, and can be carried forward
for up to five years or until used.
Age of a Qualifying Child correct answer Under 19 at the end of the year and
younger than the taxpayer; A full-time student under 24 at the end of the year
and younger than the taxpayer; Permanently and totally disabled.
Age Test for QC correct answer (1) Under 19 and younger than taxpayer. (2) Full-
time student under 24 and younger than taxpayer. (3) Permanently and totally
disabled.
Alimony and separate maintenance payments included in gross income? correct
answer Yes
Alimony Payments correct answer Payments made by one spouse to the other
spouse or former spouse under a written separation or divorce instrument.
Amended Return correct answer A tax return filed on Form 1040X after the
original return has been filed.
American Opportunity Credit (AOC) correct answer Credit for qualifying education
expenses available for tax years 2009 through 2012. The AOC may be partially
refundable.
Amount of Adoption Credit correct answer Up to $13,360 per eligible child.
,Amount of Child Tax Credit correct answer $1,000 per child.
Amount of the Lifetime Learning Credit correct answer 20% of the total qualified
expenses for all eligible students on the tax return.
Annuity correct answer A series of payments under a contract made at regular
intervals over a period of more than one year.
Are funeral expenses deductible? correct answer No
Are gambling losses deductible? correct answer Only to the extent of winnings
reported as income.
Are gambling winnings taxable? correct answer Yes
Are tax preparation fees deductible? correct answer Yes
Basis correct answer A measure of the taxpayer's investment in property for tax
purposes.
Beneficiary correct answer The owner or recipient of funds in an account, such as
an IRA, or from an insurance policy or will.
Calculating the AOC correct answer The amount of the AOC is the sum of: 100% of
the first $2,000 of qualified education expenses paid for the eligible student; 25%
of the next $2,000 of qualified education expenses.
, Camille (16) was claimed by her mother, Ida, and her father, Walter. Camille lived
with each parent an equal amount of time in 2011. Ida's AGI was $44,255.
Walter's AGI was $47,525. Who can claim Camille's dependency exemption?
correct answer Walter
Can a taxpayer who may be claimed by another person on their return claim a
dependent? correct answer No
Can the 1040X be e-filed? correct answer No.
Capital Gain Distributions correct answer Amounts paid by mutual funds,
regulated investment companies, and real estate investment trusts.
Carl and Carrie are married. Carol is their qualifying child. No one can claim Carl or
Carrie on their tax return. Carol is married to Paul. Neither Carol nor Paul is
required to file a tax return. Neither would have a tax liability if they filed
separately. Carol had no income. Paul is filing a joint return with Carol only to
claim a refund of the tax withheld. Carl, Carrie, Carol, and Paul are all US citizens.
Can Carl and Carrie claim Carol as a dependent? correct answer Yes
Cassandra is single. Her son, William (3), lived with her for all of 2011. William had
no income. Qualifying child or relative? correct answer Qualifying Child
Certain foster care payments included in gross income? correct answer No
Certain income from the discharge of indebtedness included in gross income?
correct answer Yes
