Enrolled Agent Exam Part 1, Enrolled Agent - Part 1 (Possible questions with complete answers)

Dual status alien correct answers An alien who is both a nonresident and resident alien during the same tax year. The most common dual-status tax years are the years of arrival and departure. Resident Alien correct answers If either the green card test or the substantial presence test is met. Even if the taxpayer does not meet either of these tests, (s)he may be able to choose to be treated as a U.S. resident for part of the year. Green Card Test correct answers A taxpayer is a resident for tax purposes if (s)he was a lawful permanent resident (immigrant) of the United States at any time during the year Substantial presence Test correct answers A taxpayer is considered a U.S. resident if she/he was physically present in the US for at least (1) 31 days during 2018 and 183 days during 2018, 2017, and 2016, counting all days of physical presence in 2018 but only 1/3 of days in 2017, and 1/6 of days in 2016 Provisional Income threshholds for exclusion of SS Benefits from Income correct answers MFJ -- 32,000 to 44,000 All Others-- 25,000 to 34,000 MFSLT -- 0 What is excluded from gross income in the case of insurance proceeds? correct answers Disability pay (excluded) Accident insurance proceeds. sub for lost income (excluded) Damages for emotional distress (included if no physical injury) Punitive damages (included) Gross income does not include benefits specified that might be received in the form of disability pay, health or accident insurance proceeds (even if benefits are a substitute for lost income), workers' compensation awards, or other damages for personal physical injury or physical sickness. Also excluded are damages received for emotional distress if an injury has its origin in a physical injury or physical sickness (regardless of whether the damages are received by a lawsuit or an agreement). Punitive damages received are included in gross income even if in connection with a physical injury or sickness Is unemployment compensation included in gross income? correct answers Yes Is disability pay included in gross income? correct answers No Are punitive damages included in gross income? correct answers Yes (unless you received a physical injury in connection with the punitive damages)