TAX PREP STUDY GUIDE QUESTIONS
WITH CORRECT ANSWERS 2026
(Oregon) T/F: On your federal Schedule B, it shows that you received nontaxable interest from:
the City of San Francisco, CA; the City of Seattle, WA; and the City of Medford, OR. You have no
additions on your Oregon return. - CORRECT ANSWER -F
Nontaxable interest is from muni bonds. Interest from out-of-state munis is taxable by Oregon
and is entered on Form 40 line 9.
(Oregon) (T/F) When electronically filing your Oregon return, you do not need to file Form EF if
you are using a Federal PIN. - CORRECT ANSWER -T
Form EF is only required when doing a "state-only" electronic filing and the associated federal
return does not match the federal return already filed.
(Oregon) Tia and Colin are married. Colin is a full-year OR resident and Tia is part-year OR
resident. The filed MFS on their Federal returns and both itemized. The are allowed to use what
forms for OR?
a. Tia Form 40N, Colin Form 40
b. Tia Form 40P, Colin Form 40
c. They can both use Form 40 but they have to file separately. - CORRECT ANSWER -b
(Oregon) (T/F): For Oregon, you can electronically file separately from electronically filing
Federal. - CORRECT ANSWER -F
(Oregon) (T/F): Stan and Kyle are married and have homes in OR and WA. The live at their OR
home from April to September. They are retired. They have always considered WA to be their
home. They are OR residents and must file a return. - CORRECT ANSWER -F
,Less than 200 days plus definition of domicile.
(Oregon) Which of the following types of "Oregon source" income is taxable to a nonresident?
a. Royalties received from OR properties.
b. Income from an OR farm.
c. Oregon unemployment.
d. All of the above. - CORRECT ANSWER -d
(Oregon) (T/F): On your federal Schedule B, it shows that you received nontaxable interest from:
the City of San Francisco, CA; the City of Seattle, WA; and the City of Medford, OR. You have no
additions on your Oregon return. - CORRECT ANSWER -F
Nontaxable interest is usually from muni bonds. Interest from out-of-state munis is taxable by
Oregon and is entered on Form 40 line 9.
(Oregon) (T/F) Federal does not tax interest on obligations from states or their political
subdivisions. If you have interest from another state, you will have an addition on the Oregon
return. - CORRECT ANSWER -T
Example: Out-of-state municipal bonds.
(Oregon) Jared is a nonresident of Oregon and is stationed in Oregon on active duty. He also has
a part-time job. Jared has been in OR for 7 months. What form should he use?
a. 40.
b. 40P.
c. 40N. - CORRECT ANSWER -c
,(Oregon) (T/F) John, a single taxpayer, will file a return with itemized deductions and $500,000
of AGI. His itemized deductions are limited for federal and therefore he will need to do a
worksheet for Oregon to determine the amount of deductions to take on his Oregon return. -
CORRECT ANSWER -T
2013 Pub. 17.5 page 84. The worksheet is needed to compute the amount of tax paid to OR that
is entered on Form 40 line 24.
(Oregon) (T/F) If you use the standard deduction on your federal return, you must use the
standard deduction on your Oregon return. - CORRECT ANSWER -F
(Oregon) (T/F) The Artist Charitable Contribution is a subtraction on the Oregon return and the
taxpayer must itemize on the Oregon return to receive it. - CORRECT ANSWER -T
This subtraction allows artists to contribute their own work to a charitable organization. An
appraisal report showing the FMV is required. The subtraction is the FMV (possibly limited by
the 30/50% limit) minus the basis (which is the amount allowed on the Federal return). So you
itemize on Federal to deduct the basis and you take the subtraction on OR to get the rest.
(Oregon) (T/F) Sara and Como are married filing joint. Sara is age 64 and Como is age 45 at year-
end. They will itemize. Schedule A line 1 is $9000 and line 3 is $2100. Their special Oregon
medical deduction is $2100. - CORRECT ANSWER -F
For 2013, it is never more than $1800 per person over age 62.
(Oregon) T/F: Itemized deductions are not limited on Oregon returns. - CORRECT ANSWER -F
If they are limited on the federal return, they are limited on the Oregon return. This effects the
amount of Oregon state income tax that is subtracted from the federal total; a calculation is
required to determine the correct amount.
, (Oregon) (T/F) Bill, age 62, has medical deductions on his federal return of $592 and an AGI of
$32,105. His Oregon medical deduction will be the same. - CORRECT ANSWER -F
32105(0.10) = $3211 so his qualified medical expenses were 3211+592 = $3803. Therefore, his
OR special medical deduction will be $1800.
(Oregon) Gambling winnings claimed on the federal return were $1000. This includes 2 Oregon
lottery tickets that won $300 each. Gambling losses of $750 were claimed on Schedule A of
which $150 was OR lottery expense. How much is the OR subtraction?
a. $0.
b. $150.
c. $600.
d. $750. - CORRECT ANSWER -c
Oregon does not tax OR lottery winnings of $600 or less (from a single ticket).
So if this income appears on the federal return, it is a subtraction on the OR return.
Note that there is also an Oregon *addition* in this case because the Schedule A deduction is
reduced (750-400 = $350 addition).
(Oregon) Gambling winnings claimed on the federal return were $1000. This includes 2 Oregon
lottery tickets that won $300 each. Gambling losses of $750 were claimed on Schedule A of
which $150 was OR lottery expense. How much is the OR addition?
a. $150.
b. $350.
c. $400.
WITH CORRECT ANSWERS 2026
(Oregon) T/F: On your federal Schedule B, it shows that you received nontaxable interest from:
the City of San Francisco, CA; the City of Seattle, WA; and the City of Medford, OR. You have no
additions on your Oregon return. - CORRECT ANSWER -F
Nontaxable interest is from muni bonds. Interest from out-of-state munis is taxable by Oregon
and is entered on Form 40 line 9.
(Oregon) (T/F) When electronically filing your Oregon return, you do not need to file Form EF if
you are using a Federal PIN. - CORRECT ANSWER -T
Form EF is only required when doing a "state-only" electronic filing and the associated federal
return does not match the federal return already filed.
(Oregon) Tia and Colin are married. Colin is a full-year OR resident and Tia is part-year OR
resident. The filed MFS on their Federal returns and both itemized. The are allowed to use what
forms for OR?
a. Tia Form 40N, Colin Form 40
b. Tia Form 40P, Colin Form 40
c. They can both use Form 40 but they have to file separately. - CORRECT ANSWER -b
(Oregon) (T/F): For Oregon, you can electronically file separately from electronically filing
Federal. - CORRECT ANSWER -F
(Oregon) (T/F): Stan and Kyle are married and have homes in OR and WA. The live at their OR
home from April to September. They are retired. They have always considered WA to be their
home. They are OR residents and must file a return. - CORRECT ANSWER -F
,Less than 200 days plus definition of domicile.
(Oregon) Which of the following types of "Oregon source" income is taxable to a nonresident?
a. Royalties received from OR properties.
b. Income from an OR farm.
c. Oregon unemployment.
d. All of the above. - CORRECT ANSWER -d
(Oregon) (T/F): On your federal Schedule B, it shows that you received nontaxable interest from:
the City of San Francisco, CA; the City of Seattle, WA; and the City of Medford, OR. You have no
additions on your Oregon return. - CORRECT ANSWER -F
Nontaxable interest is usually from muni bonds. Interest from out-of-state munis is taxable by
Oregon and is entered on Form 40 line 9.
(Oregon) (T/F) Federal does not tax interest on obligations from states or their political
subdivisions. If you have interest from another state, you will have an addition on the Oregon
return. - CORRECT ANSWER -T
Example: Out-of-state municipal bonds.
(Oregon) Jared is a nonresident of Oregon and is stationed in Oregon on active duty. He also has
a part-time job. Jared has been in OR for 7 months. What form should he use?
a. 40.
b. 40P.
c. 40N. - CORRECT ANSWER -c
,(Oregon) (T/F) John, a single taxpayer, will file a return with itemized deductions and $500,000
of AGI. His itemized deductions are limited for federal and therefore he will need to do a
worksheet for Oregon to determine the amount of deductions to take on his Oregon return. -
CORRECT ANSWER -T
2013 Pub. 17.5 page 84. The worksheet is needed to compute the amount of tax paid to OR that
is entered on Form 40 line 24.
(Oregon) (T/F) If you use the standard deduction on your federal return, you must use the
standard deduction on your Oregon return. - CORRECT ANSWER -F
(Oregon) (T/F) The Artist Charitable Contribution is a subtraction on the Oregon return and the
taxpayer must itemize on the Oregon return to receive it. - CORRECT ANSWER -T
This subtraction allows artists to contribute their own work to a charitable organization. An
appraisal report showing the FMV is required. The subtraction is the FMV (possibly limited by
the 30/50% limit) minus the basis (which is the amount allowed on the Federal return). So you
itemize on Federal to deduct the basis and you take the subtraction on OR to get the rest.
(Oregon) (T/F) Sara and Como are married filing joint. Sara is age 64 and Como is age 45 at year-
end. They will itemize. Schedule A line 1 is $9000 and line 3 is $2100. Their special Oregon
medical deduction is $2100. - CORRECT ANSWER -F
For 2013, it is never more than $1800 per person over age 62.
(Oregon) T/F: Itemized deductions are not limited on Oregon returns. - CORRECT ANSWER -F
If they are limited on the federal return, they are limited on the Oregon return. This effects the
amount of Oregon state income tax that is subtracted from the federal total; a calculation is
required to determine the correct amount.
, (Oregon) (T/F) Bill, age 62, has medical deductions on his federal return of $592 and an AGI of
$32,105. His Oregon medical deduction will be the same. - CORRECT ANSWER -F
32105(0.10) = $3211 so his qualified medical expenses were 3211+592 = $3803. Therefore, his
OR special medical deduction will be $1800.
(Oregon) Gambling winnings claimed on the federal return were $1000. This includes 2 Oregon
lottery tickets that won $300 each. Gambling losses of $750 were claimed on Schedule A of
which $150 was OR lottery expense. How much is the OR subtraction?
a. $0.
b. $150.
c. $600.
d. $750. - CORRECT ANSWER -c
Oregon does not tax OR lottery winnings of $600 or less (from a single ticket).
So if this income appears on the federal return, it is a subtraction on the OR return.
Note that there is also an Oregon *addition* in this case because the Schedule A deduction is
reduced (750-400 = $350 addition).
(Oregon) Gambling winnings claimed on the federal return were $1000. This includes 2 Oregon
lottery tickets that won $300 each. Gambling losses of $750 were claimed on Schedule A of
which $150 was OR lottery expense. How much is the OR addition?
a. $150.
b. $350.
c. $400.
