INTUIT ACADEMY TAX LEVEL 1 EXAM
QUESTIONS AND ANSWERS VERIFIED 100%
CORRECT
Sandi's daughter, Christina, is a U.S. citizen living and working outside of the US.
Her annual income is $75,000.
Based on the information above, which option is correct? - ANSWER -Christina
needs to file a US tax return.
Vihaan is an Indian citizen. He came to the US to pursue a degree in veterinary
medicine. He will be in the US for three years and intends to return home to India
during breaks and once he's completed his degree.
Based on the information above, what is Vihaan's filing status? - ANSWER -
Vihaan meets the substantial presence test, and needs to file as a Resident Alien.
A taxpayer's source of income is not important for the foreign tax credit (FTC) to
offset U.S. taxes on foreign source income. - ANSWER -False
6 Types of Income Sources - ANSWER -Interest Dividend Compensation Rent
And Royalty Sales of Property, Pension and Retirement Plans Miscellaneous -
Flow Through Information Fringe Benefits
A dividend from a foreign corporation may be U.S. source income? - ANSWER -
True
Which of the below are considered types of income? - ANSWER -Interest income
Dividend income
Sales of property
Compensation
,Income that is nontaxable should be be shown on the taxpayer's tax return. -
ANSWER -True
Business and investment income provides information on the treatment of certain
income from: - ANSWER -Rent
Royalties
Partnership income
A foreign corporation doing business in the U.S. receives interest income from
Shruthi, a U.S. citizen and resident.Based on the information above, which of the
following is true about the interest income? - ANSWER -The interest income is a
U.S. source of income.
Melissa, a U.S. citizen, received dividends from an Italian corporation with no
U.S. ECI.
Based on the information above, which of the following is true about the dividend
income? - ANSWER -The dividend income is a foreign sourced income.
Levi, a citizen and resident of the Netherlands, was contracted with a U.S.
corporation to develop a new product. In developing this product, Levi worked in
the U.S. for nine weeks. The entire project took twenty-one weeks. He was paid
$265,000.
Which of the following is true about the compensation Levi received? - ANSWER
-The compensations Levi received requires allocation.
A partnership has 65% foreign source ordinary income.
Which of the following is true about the percentage of distribution? - ANSWER -
65 % of the distribution would be foreign sourced income.
Tom and Gerry are U.S. citizens and form a U.S. based partnership with equal
participation. The partnership sold a piece of U.S. based property for a gain of
$30,000. Tom lives in the U.S. and Gerry lives in Germany.
,Based on the information above, which of the following is true about their income?
- ANSWER -Tom would have $15,000 U.S. source income.
Incorrectly selected
Gerry would have $15,000 U.S. source income
Correctly unselected
All of the above are correct.
Meghan owns a daycare center she runs from her home. She also babysits for her
brother on Saturdays. Her brother reimburses her expenses instead of paying her an
hourly rate.
Based on the information above, which of the following is true? - ANSWER -The
expense reimbursement her brother provides is not taxable income.
Mark is a member of our armed forces. He receives combat pay for his duties.
Based on the information above, which of the following is true? - ANSWER -The
amount of Mark's combat pay is not taxable.
Which of the following is true about Judy's income? - ANSWER -Judy doesn't
have to include the housing allowance in her income.
Veronica's business partner gifted a watch to Veronica's wife as a fringe benefit.
Based on the information above, which of the following is true? - ANSWER -The
watch is taxable because it is considered to have been gifted to Veronica.
Veronica's business partner agrees to pay 25% of Veronica's income directly to
her spouse. Does Veronica need to report the 25% paid to her spouse as income? -
ANSWER -Veronica must include the 25% paid to her spouse as income and it is
taxable.
Judy is a member of the clergy. She received a housing allowance.
, Which of the following is true about Judy's income? - ANSWER -Judy doesn't
have to include the housing allowance in her income.
Employers prepare Form W-2 at the end of each year.Which employees must
receive a Form W-2? - ANSWER -Every employee that receives payment for
services from the employer during the year.
Parts of Form W-2 - ANSWER -1. Taxable Income 2. Federal Tax Amount 3.
Amount of Compensation subject to Social Security tax
4.Social Security Tax Withheld 5.Reports compensation subject to Medicare 6.
Amount of Medicare tax withheld.
7. All reported earnings from tips.
8. What employer reports were earned as tips for the employee. 10. Reports the
total dependent care benefits paid or incurred by the employer on behalf of an
employee.
11. Deferred compensation received from the employer in a non qualified plan 12.
Uses codes to list other compensation or reductions applicable on your taxable
income.
16.-20. shows the employee's state and local earnings and withholding detail. This
includes the state and local taxes that are deductible (if a taxpayer itemizes on their
federal tax return.)
W-2 - ANSWER -The IRS requires employers to report employee wage and salary
information on Form W-2. Employees will generally receive Form W-2 from every
employer they work for during the year. The employee's Form W-2 reports the
total taxable wages, social security and Medicare wages, withholdings, and
additional income information for the calendar year.
Form W-2 is required for every employee who receives payment for services
during the year (including non-cash payments).
If an employee earns wages, they will receive a Form W-2.
If an employee earns wages and any tax is withheld, they will receive a Form W2.
QUESTIONS AND ANSWERS VERIFIED 100%
CORRECT
Sandi's daughter, Christina, is a U.S. citizen living and working outside of the US.
Her annual income is $75,000.
Based on the information above, which option is correct? - ANSWER -Christina
needs to file a US tax return.
Vihaan is an Indian citizen. He came to the US to pursue a degree in veterinary
medicine. He will be in the US for three years and intends to return home to India
during breaks and once he's completed his degree.
Based on the information above, what is Vihaan's filing status? - ANSWER -
Vihaan meets the substantial presence test, and needs to file as a Resident Alien.
A taxpayer's source of income is not important for the foreign tax credit (FTC) to
offset U.S. taxes on foreign source income. - ANSWER -False
6 Types of Income Sources - ANSWER -Interest Dividend Compensation Rent
And Royalty Sales of Property, Pension and Retirement Plans Miscellaneous -
Flow Through Information Fringe Benefits
A dividend from a foreign corporation may be U.S. source income? - ANSWER -
True
Which of the below are considered types of income? - ANSWER -Interest income
Dividend income
Sales of property
Compensation
,Income that is nontaxable should be be shown on the taxpayer's tax return. -
ANSWER -True
Business and investment income provides information on the treatment of certain
income from: - ANSWER -Rent
Royalties
Partnership income
A foreign corporation doing business in the U.S. receives interest income from
Shruthi, a U.S. citizen and resident.Based on the information above, which of the
following is true about the interest income? - ANSWER -The interest income is a
U.S. source of income.
Melissa, a U.S. citizen, received dividends from an Italian corporation with no
U.S. ECI.
Based on the information above, which of the following is true about the dividend
income? - ANSWER -The dividend income is a foreign sourced income.
Levi, a citizen and resident of the Netherlands, was contracted with a U.S.
corporation to develop a new product. In developing this product, Levi worked in
the U.S. for nine weeks. The entire project took twenty-one weeks. He was paid
$265,000.
Which of the following is true about the compensation Levi received? - ANSWER
-The compensations Levi received requires allocation.
A partnership has 65% foreign source ordinary income.
Which of the following is true about the percentage of distribution? - ANSWER -
65 % of the distribution would be foreign sourced income.
Tom and Gerry are U.S. citizens and form a U.S. based partnership with equal
participation. The partnership sold a piece of U.S. based property for a gain of
$30,000. Tom lives in the U.S. and Gerry lives in Germany.
,Based on the information above, which of the following is true about their income?
- ANSWER -Tom would have $15,000 U.S. source income.
Incorrectly selected
Gerry would have $15,000 U.S. source income
Correctly unselected
All of the above are correct.
Meghan owns a daycare center she runs from her home. She also babysits for her
brother on Saturdays. Her brother reimburses her expenses instead of paying her an
hourly rate.
Based on the information above, which of the following is true? - ANSWER -The
expense reimbursement her brother provides is not taxable income.
Mark is a member of our armed forces. He receives combat pay for his duties.
Based on the information above, which of the following is true? - ANSWER -The
amount of Mark's combat pay is not taxable.
Which of the following is true about Judy's income? - ANSWER -Judy doesn't
have to include the housing allowance in her income.
Veronica's business partner gifted a watch to Veronica's wife as a fringe benefit.
Based on the information above, which of the following is true? - ANSWER -The
watch is taxable because it is considered to have been gifted to Veronica.
Veronica's business partner agrees to pay 25% of Veronica's income directly to
her spouse. Does Veronica need to report the 25% paid to her spouse as income? -
ANSWER -Veronica must include the 25% paid to her spouse as income and it is
taxable.
Judy is a member of the clergy. She received a housing allowance.
, Which of the following is true about Judy's income? - ANSWER -Judy doesn't
have to include the housing allowance in her income.
Employers prepare Form W-2 at the end of each year.Which employees must
receive a Form W-2? - ANSWER -Every employee that receives payment for
services from the employer during the year.
Parts of Form W-2 - ANSWER -1. Taxable Income 2. Federal Tax Amount 3.
Amount of Compensation subject to Social Security tax
4.Social Security Tax Withheld 5.Reports compensation subject to Medicare 6.
Amount of Medicare tax withheld.
7. All reported earnings from tips.
8. What employer reports were earned as tips for the employee. 10. Reports the
total dependent care benefits paid or incurred by the employer on behalf of an
employee.
11. Deferred compensation received from the employer in a non qualified plan 12.
Uses codes to list other compensation or reductions applicable on your taxable
income.
16.-20. shows the employee's state and local earnings and withholding detail. This
includes the state and local taxes that are deductible (if a taxpayer itemizes on their
federal tax return.)
W-2 - ANSWER -The IRS requires employers to report employee wage and salary
information on Form W-2. Employees will generally receive Form W-2 from every
employer they work for during the year. The employee's Form W-2 reports the
total taxable wages, social security and Medicare wages, withholdings, and
additional income information for the calendar year.
Form W-2 is required for every employee who receives payment for services
during the year (including non-cash payments).
If an employee earns wages, they will receive a Form W-2.
If an employee earns wages and any tax is withheld, they will receive a Form W2.
