Enrolled Agent Exam Part 1 with all Correct & 100%
Verified Answers |Actual Complete Update |Already
Graded A+
Dual status alien ✔Correct Answer-An alien who is both a nonresident and resident alien
during the same tax year. The most common dual-status tax years are the years of arrival and
departure.
Resident Alien ✔Correct Answer-If either the green card test or the substantial presence test
is met. Even if the taxpayer does not meet either of these tests, (s)he may be able to choose to
be treated as a U.S. resident for part of the year.
Green Card Test ✔Correct Answer-A taxpayer is a resident for tax purposes if (s)he was a
lawful permanent resident (immigrant) of the United States at any time during the year
Substantial presence Test ✔Correct Answer-A taxpayer is considered a U.S. resident if she/he
was physically present in the US for at least (1) 31 days during 2018 and 183 days during 2018,
2017, and 2016, counting all days of physical presence in 2018 but only 1/3 of days in 2017, and
1/6 of days in 2016
Provisional Income threshholds for exclusion of SS Benefits from Income ✔Correct Answer-
MFJ -- 32,000 to 44,000
All Others-- 25,000 to 34,000
MFSLT -- 0
What is excluded from gross income in the case of insurance proceeds? ✔Correct Answer-
Disability pay (excluded)
Accident insurance proceeds. sub for lost income (excluded)
Damages for emotional distress (included if no physical injury)
Punitive damages (included)
Gross income does not include benefits specified that might be received in the form of disability
pay, health or accident insurance proceeds (even if benefits are a substitute for lost income),
workers' compensation awards, or other damages for personal physical injury or physical
sickness. Also excluded are damages received for emotional distress if an injury has its origin in
a physical injury or physical sickness (regardless of whether the damages are received by a
lawsuit or an agreement). Punitive damages received are included in gross income even if in
connection with a physical injury or sickness
Is unemployment compensation included in gross income? ✔Correct Answer-Yes
, Is disability pay included in gross income? ✔Correct Answer-No
Are punitive damages included in gross income? ✔Correct Answer-Yes (unless you received a
physical injury in connection with the punitive damages)
Are benefits from a health and accident plan included in gross income if paid by employer?
✔Correct Answer-No (if you received a physical injury in connection with the benefits)
is compensation for lost wages included in gross income? ✔Correct Answer-No, as long as the
income was given because of physical injury or illness
is compensation due to punitive damages included in gross income? ✔Correct Answer-No, as
long as the income was given because of physical injury or illness
In December 2018, Jim and Tina, a married couple with $50,000 in gross income, cashed
qualified Series EE U.S. Savings Bonds, which they had purchased in January 2015. The proceeds
were used to help pay for their son's 2018 college tuition. They received gross proceeds of
$3,500, representing principal of $3,000 and interest of $500. The qualified higher educational
expenses they paid during 2018 totaled $2,100. Their modified adjusted gross income for 2018
was $80,000. How much of the $500 interest can Jim and Tina exclude from income for 2018?
✔Correct Answer-$300. Interest is excluded as long as the gross amount received (principal and
interest) do not exceed qualified educational expenses. If they do exceed that amount, the
amount excluded is limited to the percentage. 2100/3500 = .6 *500 = 300. The exclusion is
reduced when AGI exceeds a threshold of $79,550 (single) or $119,300 (MFJ). completely
phased out at $94,550 and $149,300
What factors determine tax home? ✔Correct Answer-1. The taxpayer performs his or her
business in the area surrounding his/her main home and uses that for lodging while in the area.
2. The taxpayer has living expenses at his or her main home that are duplicated because
business requires him/her to be away from the main home.
3. The taxpayer has not abandoned the area in which both his/her traditional place of lodging
and man home; family members live at his/her main home. She often uses this main home for
lodging.
Under what circumstance is a day NOT considered a day of personal use of a dwelling unit for
determining if it is used as a home? ✔Correct Answer-If the taxpayer rents the home at fair
rental value to any person (including relatives), such use by that person is not considered
personal use of the home
When are meals deductible? ✔Correct Answer-50% of meals are deductible if eaten while
away from home on business or with a client or business associate.
Are entertainment expenses deductible? ✔Correct Answer-No
Verified Answers |Actual Complete Update |Already
Graded A+
Dual status alien ✔Correct Answer-An alien who is both a nonresident and resident alien
during the same tax year. The most common dual-status tax years are the years of arrival and
departure.
Resident Alien ✔Correct Answer-If either the green card test or the substantial presence test
is met. Even if the taxpayer does not meet either of these tests, (s)he may be able to choose to
be treated as a U.S. resident for part of the year.
Green Card Test ✔Correct Answer-A taxpayer is a resident for tax purposes if (s)he was a
lawful permanent resident (immigrant) of the United States at any time during the year
Substantial presence Test ✔Correct Answer-A taxpayer is considered a U.S. resident if she/he
was physically present in the US for at least (1) 31 days during 2018 and 183 days during 2018,
2017, and 2016, counting all days of physical presence in 2018 but only 1/3 of days in 2017, and
1/6 of days in 2016
Provisional Income threshholds for exclusion of SS Benefits from Income ✔Correct Answer-
MFJ -- 32,000 to 44,000
All Others-- 25,000 to 34,000
MFSLT -- 0
What is excluded from gross income in the case of insurance proceeds? ✔Correct Answer-
Disability pay (excluded)
Accident insurance proceeds. sub for lost income (excluded)
Damages for emotional distress (included if no physical injury)
Punitive damages (included)
Gross income does not include benefits specified that might be received in the form of disability
pay, health or accident insurance proceeds (even if benefits are a substitute for lost income),
workers' compensation awards, or other damages for personal physical injury or physical
sickness. Also excluded are damages received for emotional distress if an injury has its origin in
a physical injury or physical sickness (regardless of whether the damages are received by a
lawsuit or an agreement). Punitive damages received are included in gross income even if in
connection with a physical injury or sickness
Is unemployment compensation included in gross income? ✔Correct Answer-Yes
, Is disability pay included in gross income? ✔Correct Answer-No
Are punitive damages included in gross income? ✔Correct Answer-Yes (unless you received a
physical injury in connection with the punitive damages)
Are benefits from a health and accident plan included in gross income if paid by employer?
✔Correct Answer-No (if you received a physical injury in connection with the benefits)
is compensation for lost wages included in gross income? ✔Correct Answer-No, as long as the
income was given because of physical injury or illness
is compensation due to punitive damages included in gross income? ✔Correct Answer-No, as
long as the income was given because of physical injury or illness
In December 2018, Jim and Tina, a married couple with $50,000 in gross income, cashed
qualified Series EE U.S. Savings Bonds, which they had purchased in January 2015. The proceeds
were used to help pay for their son's 2018 college tuition. They received gross proceeds of
$3,500, representing principal of $3,000 and interest of $500. The qualified higher educational
expenses they paid during 2018 totaled $2,100. Their modified adjusted gross income for 2018
was $80,000. How much of the $500 interest can Jim and Tina exclude from income for 2018?
✔Correct Answer-$300. Interest is excluded as long as the gross amount received (principal and
interest) do not exceed qualified educational expenses. If they do exceed that amount, the
amount excluded is limited to the percentage. 2100/3500 = .6 *500 = 300. The exclusion is
reduced when AGI exceeds a threshold of $79,550 (single) or $119,300 (MFJ). completely
phased out at $94,550 and $149,300
What factors determine tax home? ✔Correct Answer-1. The taxpayer performs his or her
business in the area surrounding his/her main home and uses that for lodging while in the area.
2. The taxpayer has living expenses at his or her main home that are duplicated because
business requires him/her to be away from the main home.
3. The taxpayer has not abandoned the area in which both his/her traditional place of lodging
and man home; family members live at his/her main home. She often uses this main home for
lodging.
Under what circumstance is a day NOT considered a day of personal use of a dwelling unit for
determining if it is used as a home? ✔Correct Answer-If the taxpayer rents the home at fair
rental value to any person (including relatives), such use by that person is not considered
personal use of the home
When are meals deductible? ✔Correct Answer-50% of meals are deductible if eaten while
away from home on business or with a client or business associate.
Are entertainment expenses deductible? ✔Correct Answer-No
