HR BLOCK FINAL TEST (ITC 2026) 2 VERSIONS ACTUAL EXAM 200
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONLES (VERIFIED ANSWERS) | ASSURED SUCCESS 2026-
2027
What are the long-term capital gain tax rates?
Long-term capital gains are taxed at lower rates than ordinary income and short-
term capital gains.
For 2021, the maximum tax rates for most long-term capital gains are:
0% on taxable income less than $80,800 MFJ/QW, $54,100 HH, and $40,400
S/MFS that otherwise would be taxed at higher tax rates.
15% on taxable income greater than the amounts listed above and below
$501,600 MFJ/QW, $473,750 HH, $445,850 S, and $250,800 MFS.
20% on any amount above the maximum 15% rate amount.
What income is taxed at the 28% maximum rate?
Long-term gain from the sale of collectibles and certain gain from the sale of
qualified small business stock.
What is the maximum net capital loss that a taxpayer may deduct in one year?
Capital losses may be used to offset capital gains from the sale of other
property. If a taxpayer's capital losses exceed their capital gains, they can
use up to $3,000 of the excess loss to offset ordinary income each year. For
taxpayers using the MFS filing status, the amount that can be used to offset
ordinary income is limited to $1,500 each year.
,What does Form 1099-B report? What about Form 1099-S?
Form 1099-B is used by brokers to report the proceeds from the sale of shares of
stock, mutual funds, bonds, commodities, futures contracts, foreign currency
contracts, and
other securities.
Form 1099-S is used by the person responsible for the closing of a real estate
transaction to report the sales proceeds.
When can a taxpayer exclude all or some of the gains from the sale of their home?
A taxpayer can exclude up to $250,000 ($500,000 MFJ) on the sale of their main
home if they owned the home and used it as their main residence for at least
two of the last five years and did not exclude the gain from the sale of
another home in the two-year period ending on the date of the sale.
What is the maximum amount of the American Opportunity Tax Credit a taxpayer
could receive per student?
$1,650
$1,800
$2,000
$2,500
$2,500
,Which test for a qualifying child does NOT need to be met in order for the child to
be a qualifying person for purposes of Earned Income Credit (EIC)?
Age.
Relationship.
Residency.
Support.
Support.
What is the difference between injured spouse allocation and innocent spouse
relief?
The IRS provides an injured spouse allocation for the taxpayer to protect their
portion of a refund from a spouse's past-due federal income tax, unpaid student
loans, unpaid child and spousal support, or state income tax.
The IRS provides innocent spouse relief to taxpayers who file a joint return and
later learn that their spouse has underestimated income (or overstated a credit
or deduction) on the return.
, Which of the following expenses qualifies for an education credit in 2021?
Tuition payments.
The taxpayer didn't receive scholarships, grants, or other nontaxable benefits.
Fees for an optional student
activity. Cost of student
medical fees.
Tuition payments.
The taxpayer received a nontaxable grant, which covered the entire tuition
expense.
How is the gross income filing requirement determined for most
nondependent taxpayers?
The taxpayer's standard deduction, including the additional amounts for age.
However, for married filing separately, or married filing jointly when the
spouses did not live
together at the end of the year, the amount is $5.
What document will the taxpayer receive from their employer reporting
disability pension payments?
The income is reported on Form 1099-R.
What types of income must be reported on Schedule 1 (Form 1040) and then
reported on Form 1040?
Gambling winnings, alimony, jury duty pay, canceled debts, and hobby income
are some examples of income that must be reported on Schedule 1 (Form 1040)
and then reported on Form 1040.
QUESTIONS AND CORRECT DETAILED ANSWERS WITH
RATIONLES (VERIFIED ANSWERS) | ASSURED SUCCESS 2026-
2027
What are the long-term capital gain tax rates?
Long-term capital gains are taxed at lower rates than ordinary income and short-
term capital gains.
For 2021, the maximum tax rates for most long-term capital gains are:
0% on taxable income less than $80,800 MFJ/QW, $54,100 HH, and $40,400
S/MFS that otherwise would be taxed at higher tax rates.
15% on taxable income greater than the amounts listed above and below
$501,600 MFJ/QW, $473,750 HH, $445,850 S, and $250,800 MFS.
20% on any amount above the maximum 15% rate amount.
What income is taxed at the 28% maximum rate?
Long-term gain from the sale of collectibles and certain gain from the sale of
qualified small business stock.
What is the maximum net capital loss that a taxpayer may deduct in one year?
Capital losses may be used to offset capital gains from the sale of other
property. If a taxpayer's capital losses exceed their capital gains, they can
use up to $3,000 of the excess loss to offset ordinary income each year. For
taxpayers using the MFS filing status, the amount that can be used to offset
ordinary income is limited to $1,500 each year.
,What does Form 1099-B report? What about Form 1099-S?
Form 1099-B is used by brokers to report the proceeds from the sale of shares of
stock, mutual funds, bonds, commodities, futures contracts, foreign currency
contracts, and
other securities.
Form 1099-S is used by the person responsible for the closing of a real estate
transaction to report the sales proceeds.
When can a taxpayer exclude all or some of the gains from the sale of their home?
A taxpayer can exclude up to $250,000 ($500,000 MFJ) on the sale of their main
home if they owned the home and used it as their main residence for at least
two of the last five years and did not exclude the gain from the sale of
another home in the two-year period ending on the date of the sale.
What is the maximum amount of the American Opportunity Tax Credit a taxpayer
could receive per student?
$1,650
$1,800
$2,000
$2,500
$2,500
,Which test for a qualifying child does NOT need to be met in order for the child to
be a qualifying person for purposes of Earned Income Credit (EIC)?
Age.
Relationship.
Residency.
Support.
Support.
What is the difference between injured spouse allocation and innocent spouse
relief?
The IRS provides an injured spouse allocation for the taxpayer to protect their
portion of a refund from a spouse's past-due federal income tax, unpaid student
loans, unpaid child and spousal support, or state income tax.
The IRS provides innocent spouse relief to taxpayers who file a joint return and
later learn that their spouse has underestimated income (or overstated a credit
or deduction) on the return.
, Which of the following expenses qualifies for an education credit in 2021?
Tuition payments.
The taxpayer didn't receive scholarships, grants, or other nontaxable benefits.
Fees for an optional student
activity. Cost of student
medical fees.
Tuition payments.
The taxpayer received a nontaxable grant, which covered the entire tuition
expense.
How is the gross income filing requirement determined for most
nondependent taxpayers?
The taxpayer's standard deduction, including the additional amounts for age.
However, for married filing separately, or married filing jointly when the
spouses did not live
together at the end of the year, the amount is $5.
What document will the taxpayer receive from their employer reporting
disability pension payments?
The income is reported on Form 1099-R.
What types of income must be reported on Schedule 1 (Form 1040) and then
reported on Form 1040?
Gambling winnings, alimony, jury duty pay, canceled debts, and hobby income
are some examples of income that must be reported on Schedule 1 (Form 1040)
and then reported on Form 1040.
