2024 5 HOUR CALIFORNIA TAX LAW LATEST UPDATE 100% PASS

2024 5 HOUR CALIFORNIA TAX LAW LATEST UPDATE 100% PASS In an effort to improve the earthquake safety of his home, Perry Powell spends $500 to anchor the water heater in his basement. He receives a $250 rebate from the California Residential Mitigation Program that was taxable on his Federal income tax return. Perry can exclude what amount of the rebate from his income on his California state income tax return? $250 Which of the following statements is not true regarding estimated tax payments? A taxpayer must make estimated tax payments even if he or she is a nonresident or new resident of California in 2019 and did not have a California tax liability in 2018 Erin receives and accepts a permanent job offer in Spain. She and her spouse sell their home in California, pack all of their possessions and move to Spain on May 5, 2019. Their children also relocate to Spain on the same date. They lease an apartment and enroll the children in school in Spain. They both obtain a driver's license from Spain and make numerous social connections in their new home. They have no intention of returning to California. Which of the following statements is true? Both Erin and her spouse are considered part-year residents of California Jason Golden is a business executive and resides in Washington with his family. Several times each year, he travels to other states for business purposes. His average stay is one or two weeks, and the entire time spent in California for any taxable year does not exceed six weeks. Jason's family usually remains in Washington while he is traveling for business purposes. Which of the following statements applies to Jason? Jason is not a California resident because his stays in California are temporary or transitory in nature Steve is a California resident who lives and works as a computer consultant in Walnut Creek, CA. He earned $75,000 while working for XYZ LTD in 2019. Steve additionally had a contract job from ABC Co. based in Arizona. His contract earnings totaled $17,000 in 2019. What amount is Steve's total California resident income in 2019? $92,000 Karla bought a virtual assistant device online for $200, including shipping, and had it sent to her home. However, she was not charged tax during the purchase. Karla reviews the California City & County Sales & Use Tax Rates and determines her local rate is 8.0%. What amount of Use Tax does Karla owe on her California state income tax return for this purchase? $16 All of the following are true regarding the 2019 California Earned Income Tax Credit (CalEITC) except: Self-employment income cannot be used to qualify for the CalEITC Rosalinda Guzman applies for a College Access Tax Credit (CATC) reservation on October 31, 2019. Her proposed contribution is $10,000. The California Educational Facilities Authority (CEFA) grants a $5,000 credit reservation on November 7. Rosalinda makes a $10,000 contribution to the fund on November 22, 2019. CEFA sends the credit certification to Rosalinda on December 1. Rosalinda may claim a College Access Tax Credit for what amount on her California tax return? $5,000 Ernie Brooks lived and worked exclusively in California until he retired on December 31, 2019. He moved to Nevada on January 1, 2020. His former California employer pays its employees on the 5th of every month. On January 10, 2020, Ernie received in the mail his last paycheck of $4,000 from his former California employer. What amount of the compensation is taxable by California? $4,000 A divorce decree showed Ron Fowler was to provide $2,000 a month of "family support" to his ex-spouse. No amount of the family support is designated as child support. What amount of the payment is considered alimony? $2,000 The California treatment of pension and annuity income is generally the same as the Federal treatment. For example, California and Federal law are the same regarding all of the following except: Social Security and railroad retirement benefits Terrence Gallo worked 10 years in Texas, moved to California and worked an additional 5 years for the same company. Terrence retired in California and began receiving a $10,000 annual pension, which is attributable to his services performed in both California and Texas. Terrence is taxed on what amount of his pension on his California income tax return? $10,000 A resident of California's IRA distribution is fully taxable if his or her IRA contributions were fully deductible. If his or her IRA contributions were partially or fully nondeductible, then the nondeductible contributions are not taxed when they are distributed. The taxpayer's basis is the amount of which of the following? Nondeductible contributions Olga Robles sold three properties (parcels) within the same escrow agreement. Property A is sold for $50,000, property B is sold for $10,000, and property C is sold for $60,000. Which of the following statements is true regarding Olga's real estate withholding on the sale of the three properties? Since the total sales price exceeds $100,000 and the properties are sold in one escrow, withholding is required Chloe lived in Redding and accepted a job in San Diego. Under an accountable plan, her employer reimbursed her for her actual traveling expenses from Redding to San Diego and the cost of moving her furniture to San Diego. Chloe's employer included her moving expense reimbursement of $3,200 on her Form W-2, box 12. However, Chloe's allowable moving expenses were $3,900. What amount can she deduct as moving expenses on her Schedule CA (540)? $0 During 2019, Elsa paid $800 interest on a qualified student loan. Her 2019 modified adjusted gross income (MAGI) is $50,000 and she is filing a joint return. Elsa must reduce her student loan interest deduction by what amount? $0 A taxpayer may be entitled to claim a credit for excess SDI (or VPDI) only if he or she meets which of the following conditions? All of the above Which of the following is a false statement regarding the taxation of gambling winnings and losses in California? California does not tax lottery winnings from other states Arthur is a California resident. He was ordered to pay $2,000 in alimony and $3,000 in child support to his former spouse. He meets all the requirements when paying his support. What amount can Arthur take as a deduction for these payments on his Schedule CA (540)? $2,000 Jeffery and Rosemary are married with three children ages 12, 9 and 7. They filed a joint return and had a modified adjusted gross income of $174,000 in 2019. Which of the following is permissible under California law? Earnings on CESA contributions are excluded from gross income and distributed tax free provided they are used for children's qualified education expenses Greg Murphy is a California resident. He is 35 years old and a single taxpayer. In 2019, he has salary of $36,000, U.S. Treasury interest income of $700, and dividend income of $600. Also, Greg uses the standard deduction for both Federal and California tax purposes. What is Greg's California standard deduction? $4,537 Which of the following exceptions allow a tax preparer to disclose confidential information concerning a client without their written consent? In response to an official inquiry from a Federal or State government regulatory agency All of the following actions constitute penalties, subject to fines and other disciplinary action, applicable to California Tax Return Preparers (CRTP) except: Submitting non-privileged records and information to the Franchise Tax Board (FTB) The general time limit for Franchise Tax Board (FTB) to assess additional California state income and franchise taxes is provided by Section 19057 of the Revenue and Taxation Code. Which of the following statements is true regarding the Statute of Limitations on Assessments? The law generally requires the FTB to mail a proposed deficiency assessment to the taxpayer within four years after the filing date of the taxpayer's return The Franchise Tax Board (FTB) accepts handwritten, general, or durable Power of Attorney (POA) declarations. However, the declarations must contain all of the following required information except: Taxpayer's email address