Enrolled Agent Exam Prep - Part 2
A cash-foundation taxpayer have to report gross income
A. Only for the yr wherein earnings is without a doubt received in cash.
B. For the 12 months in which profits is both in reality or constructively obtained in coins
simplest.
C. Only for the 12 months wherein profits is certainly received whether or not in coins or in
property.
D. For the yr wherein income is both really or constructively acquired, whether in cash or in
assets. - ANS-D
A home LLC with at the least two individuals that doesn't report Form 8832, Entity Classification
Election, is assessed as
A. An entity disregarded as an entity separate from its owners with the aid of applying the
policies in Regulations Section 301.7701-3
B. A partnership
C. A business enterprise
D. A non-entity that requires members to file the profits and associated charges on Form 1040 -
ANS-B
A tornado destroyed Ian's forklift in 2016. Ian had purchased the forklift for $eight,000 and had
correctly deducted $6,000 of depreciation. Ian's adjusted foundation in the forklift turned into
$2,000. Ian's coverage enterprise reimbursed him $nine,000, and he spent $7,500 for a new
forklift. How an awful lot ordinary income need to Ian report on his 2016 profits tax return?
A. $zero
B. $1,500
C. $6,000
D. $7,000 - ANS-B
Based on the following information, what is the amount of Beth's self-employment income?
Salary from her S corp $15000
Partnership earnings (wellknown accomplice) $8000
Corporate director's prices $1500
Payment from coverage agency
for misplaced income $ten thousand
A. $1500
B. $9500
, C. $19500
D. $24500 - ANS-C
Bobby Rice is an unincorporated grain farmer in Louisiana with a calendar 12 months end.
Bobby does now not stay or farm in a disaster place. Bobby computed an anticipated tax liability
of $25000 for 2016. To keep away from the failure to pay expected tax penalty, Bobby must
A. Make his first 2016 expected tax charge by way of March 1, 2017
B. Pay all his 2016 envisioned taxes through February 15, 2017, and file his tax return with the
aid of April 15, 2017
C. Include any opportunity minimum tax he expects to owe in his calculation of 2016 expected
taxes
D. Pay all of his 2016 expected taxes by means of the due date of his return. - ANS-C
Dan, a calendar-year taxpayer, has the following quantities of gross earnings for 2016:
Wages $10,000
Interest $2000
Farm Income $two hundred,000
Dan has tax, consisting of self-employment tax, of $20,000, and withholding of $1000. To keep
away from any submitting or estimated tax consequences, Dan need to
A. File an predicted tax payment through January 15, 2017, and pay 60% of the tax due
B. File his tax return and pay all the tax due via March 1, 2017
C. File an estimated tax payment with the aid of March 1, 2017, and pay sixty six 2/three% of
the tax due
D. File his tax go back and pay all the tax due via April 15, 2017 - ANS-B
During 2016, Ms. Smith had the subsequent fees referring to business real estate she owns:
County property tax, $1,975
State belongings tax, $980
Assessment for sewer production, $1,500
Charges for sewer and water carrier, $810
What is the amount Ms. Smith might also deduct as actual estate taxes on her business actual
property for 2016?
A. $2,955
B. $four,455
C. $3,765
D. $five,265 - ANS-A
A cash-foundation taxpayer have to report gross income
A. Only for the yr wherein earnings is without a doubt received in cash.
B. For the 12 months in which profits is both in reality or constructively obtained in coins
simplest.
C. Only for the 12 months wherein profits is certainly received whether or not in coins or in
property.
D. For the yr wherein income is both really or constructively acquired, whether in cash or in
assets. - ANS-D
A home LLC with at the least two individuals that doesn't report Form 8832, Entity Classification
Election, is assessed as
A. An entity disregarded as an entity separate from its owners with the aid of applying the
policies in Regulations Section 301.7701-3
B. A partnership
C. A business enterprise
D. A non-entity that requires members to file the profits and associated charges on Form 1040 -
ANS-B
A tornado destroyed Ian's forklift in 2016. Ian had purchased the forklift for $eight,000 and had
correctly deducted $6,000 of depreciation. Ian's adjusted foundation in the forklift turned into
$2,000. Ian's coverage enterprise reimbursed him $nine,000, and he spent $7,500 for a new
forklift. How an awful lot ordinary income need to Ian report on his 2016 profits tax return?
A. $zero
B. $1,500
C. $6,000
D. $7,000 - ANS-B
Based on the following information, what is the amount of Beth's self-employment income?
Salary from her S corp $15000
Partnership earnings (wellknown accomplice) $8000
Corporate director's prices $1500
Payment from coverage agency
for misplaced income $ten thousand
A. $1500
B. $9500
, C. $19500
D. $24500 - ANS-C
Bobby Rice is an unincorporated grain farmer in Louisiana with a calendar 12 months end.
Bobby does now not stay or farm in a disaster place. Bobby computed an anticipated tax liability
of $25000 for 2016. To keep away from the failure to pay expected tax penalty, Bobby must
A. Make his first 2016 expected tax charge by way of March 1, 2017
B. Pay all his 2016 envisioned taxes through February 15, 2017, and file his tax return with the
aid of April 15, 2017
C. Include any opportunity minimum tax he expects to owe in his calculation of 2016 expected
taxes
D. Pay all of his 2016 expected taxes by means of the due date of his return. - ANS-C
Dan, a calendar-year taxpayer, has the following quantities of gross earnings for 2016:
Wages $10,000
Interest $2000
Farm Income $two hundred,000
Dan has tax, consisting of self-employment tax, of $20,000, and withholding of $1000. To keep
away from any submitting or estimated tax consequences, Dan need to
A. File an predicted tax payment through January 15, 2017, and pay 60% of the tax due
B. File his tax return and pay all the tax due via March 1, 2017
C. File an estimated tax payment with the aid of March 1, 2017, and pay sixty six 2/three% of
the tax due
D. File his tax go back and pay all the tax due via April 15, 2017 - ANS-B
During 2016, Ms. Smith had the subsequent fees referring to business real estate she owns:
County property tax, $1,975
State belongings tax, $980
Assessment for sewer production, $1,500
Charges for sewer and water carrier, $810
What is the amount Ms. Smith might also deduct as actual estate taxes on her business actual
property for 2016?
A. $2,955
B. $four,455
C. $3,765
D. $five,265 - ANS-A
