HR Block Questions with Accurate
Answers
§ 7805 correct answer Authorized the Secretary of the Treasury or their delegate
to prescribe all rules and regulations
ABLE correct answer Achieving a Better Life Experience account for the disabled.
They won't lose eligibility for government programs
Accuracy Requirement correct answer Fine of 20% of any underpayment due to
negligence, misstatements, or understatement of tax.
Action on Decision (A.O.D.) correct answer Published decisions by the IRS
following a trial court ruling. The IRS will either be acquiescing (agree with the
ruling) or nonacquiescing (will continue to appeal)
Adjusted Gross Income (AGI) correct answer Gross Income - Deductions
Alimony correct answer Included in income unless the divorce separation
agreement is expressly modified to provide for an exclusion
Alternative Minimum Tax Rate correct answer 26% - 28%
Annuities correct answer Annuities (in business) involve a company promising to
pay an amount of money monthly to a person in exchange for the person paying
premiums to the issuer.
, Annuity payments include partial repayment of initial investment (excludable).
1) Payment (*) [Investment / Total Expected Return] = Excludable Amount
2) Payment - Excludable Amount = Taxable Income
Audit correct answer Generally the IRS has 3 Years to propose amendments to a
tax return. This may be extended to 6 years or more under certain circumstances.
Once the changes are published in the Revenue Agent's Report, the taxpayer has
30 days to pay or appeal.
Basis correct answer The amount of your capital investment in property for tax
purposes
Business Income correct answer A SOLE PROPRIETOR should report his gross
income - deductions.
Capital correct answer The unrecovered economic investment in property.
Capital recover is not included in income.
Capital Gains correct answer Profit (or Loss) from the sale of property or
investments (preferential tax rate compared to Ordinary Income)
Answers
§ 7805 correct answer Authorized the Secretary of the Treasury or their delegate
to prescribe all rules and regulations
ABLE correct answer Achieving a Better Life Experience account for the disabled.
They won't lose eligibility for government programs
Accuracy Requirement correct answer Fine of 20% of any underpayment due to
negligence, misstatements, or understatement of tax.
Action on Decision (A.O.D.) correct answer Published decisions by the IRS
following a trial court ruling. The IRS will either be acquiescing (agree with the
ruling) or nonacquiescing (will continue to appeal)
Adjusted Gross Income (AGI) correct answer Gross Income - Deductions
Alimony correct answer Included in income unless the divorce separation
agreement is expressly modified to provide for an exclusion
Alternative Minimum Tax Rate correct answer 26% - 28%
Annuities correct answer Annuities (in business) involve a company promising to
pay an amount of money monthly to a person in exchange for the person paying
premiums to the issuer.
, Annuity payments include partial repayment of initial investment (excludable).
1) Payment (*) [Investment / Total Expected Return] = Excludable Amount
2) Payment - Excludable Amount = Taxable Income
Audit correct answer Generally the IRS has 3 Years to propose amendments to a
tax return. This may be extended to 6 years or more under certain circumstances.
Once the changes are published in the Revenue Agent's Report, the taxpayer has
30 days to pay or appeal.
Basis correct answer The amount of your capital investment in property for tax
purposes
Business Income correct answer A SOLE PROPRIETOR should report his gross
income - deductions.
Capital correct answer The unrecovered economic investment in property.
Capital recover is not included in income.
Capital Gains correct answer Profit (or Loss) from the sale of property or
investments (preferential tax rate compared to Ordinary Income)
