OREGON TAX CONSULTANTS EXAM -
PART 2 QUESTIONS AND ANSWERS
If you file MFS can your spouse Itemize deductions and you take the standard
deduction? - Correct Answers -No, if you are MFS and one spouse itemizes, you both
have too.
What is your Rental Activity Loss reduced to if you file MFS? - Correct Answers -$12500
if you did not live to together, $0 if you lived together at all.
Can you amend your MFS to a MFJ return? - Correct Answers -Yes, you can amend to
file MFJ from MFS. But you can't file MFJ and switch to MFS after the return due date.
Can you include costs for clothing , education, medical treatment, life insurance, or
transportation in the Cost of Keeping up A Home? - Correct Answers -no, those costs
are NOT included in keeping up a home.
What costs are INCLUDED in keeping up a home? - Correct Answers -Rent, Mortgage
Interest, Real Estate Taxes, Insurance, Repairs, Utilities, & Food.
Can your live in girlfriend who does not work qualify as an Other Dependent for you? -
Correct Answers -No, because she doesn't pass the relationship test even if she passes
the Gross Income and Support Tests
What income is included in the Gross Income Test for a qualifying Relative? - Correct
Answers -Included Income: Business income - COGS, Gross Rental Income (no
expenses deducted), Partnership Income, Taxable Unemployment, Taxable Social
Security, Certain Scholarships and Grants
*Scholarships for Degree candidates that are for tuition, fees, supplies, and books are
NOT included
Is interest received as the beneficiary of an estate or trust taxable to you? - Correct
Answers -Yes, Interest received is considered taxable income
If you borrow money to purchase a Certificate of Deposit, how is the Certificate Interest
and Loan Interest treated? - Correct Answers -The Certificate interest in income and the
loan interest paid can be deducted on a schedule A up the amount of your interest
earned.
, What is Alimony and how is it treated by both parties? - Correct Answers -It is
deductible by the Payer and included in income by the Receiver only if the instrument
was put in place before 2018. After 2019 it is not included or deducted by either party.
What if a former spouse makes "extra" payments to the other former spouse outside of
Alimony? - Correct Answers -it is only deductible if its included in the decree
Where do you report Alimony paid or recieved? - Correct Answers -On a Schedule 1
What type of payments are NOT Alimony? - Correct Answers -Child support and
property settlements
Is interest you receive on tax refunds taxable? - Correct Answers -Yes, interest on
refunds is considered taxable income
When do you pay the tax on interest in an installment sale? - Correct Answers -You pay
the tax on the interest in the year it was received.
What happens to US Savings Bond interest if you have Qualified Higher Education
Expenses in the same year? - Correct Answers -You may be able to exclude all or part
of the interest income - Not if you file MFS
Is interest income from US Treasury Bills, Notes and Bonds included on state returns? -
Correct Answers -No, It is subject to federal taxes but is exempt from all state and local
taxes.
Are life insurance procedes taxable to the beneficiary? - Correct Answers -No, they are
not taxable when received or deducted when they are paid.
Where is Taxable Interest Reported? - Correct Answers -Schedule B
Where is tax- EXEMPT Interest Reported? - Correct Answers -1040 Line 2a
Where are Royalties Reported? - Correct Answers -On Schedule E
If you are the owner of mineral rights or oil and gas wells, can you recover your
investment? - Correct Answers -Yes, you can recover your investment through the
Depletion Allowance
Where do you report the sale of mineral rights and oil or gas wells? - Correct Answers -
Sales are reported on a Schedule D
Are union unemployment benefits included in income? - Correct Answers -Yes, if paid
from your union dues they are considered income. If paid from a special union fund, you
only include amounts above your contributions.
PART 2 QUESTIONS AND ANSWERS
If you file MFS can your spouse Itemize deductions and you take the standard
deduction? - Correct Answers -No, if you are MFS and one spouse itemizes, you both
have too.
What is your Rental Activity Loss reduced to if you file MFS? - Correct Answers -$12500
if you did not live to together, $0 if you lived together at all.
Can you amend your MFS to a MFJ return? - Correct Answers -Yes, you can amend to
file MFJ from MFS. But you can't file MFJ and switch to MFS after the return due date.
Can you include costs for clothing , education, medical treatment, life insurance, or
transportation in the Cost of Keeping up A Home? - Correct Answers -no, those costs
are NOT included in keeping up a home.
What costs are INCLUDED in keeping up a home? - Correct Answers -Rent, Mortgage
Interest, Real Estate Taxes, Insurance, Repairs, Utilities, & Food.
Can your live in girlfriend who does not work qualify as an Other Dependent for you? -
Correct Answers -No, because she doesn't pass the relationship test even if she passes
the Gross Income and Support Tests
What income is included in the Gross Income Test for a qualifying Relative? - Correct
Answers -Included Income: Business income - COGS, Gross Rental Income (no
expenses deducted), Partnership Income, Taxable Unemployment, Taxable Social
Security, Certain Scholarships and Grants
*Scholarships for Degree candidates that are for tuition, fees, supplies, and books are
NOT included
Is interest received as the beneficiary of an estate or trust taxable to you? - Correct
Answers -Yes, Interest received is considered taxable income
If you borrow money to purchase a Certificate of Deposit, how is the Certificate Interest
and Loan Interest treated? - Correct Answers -The Certificate interest in income and the
loan interest paid can be deducted on a schedule A up the amount of your interest
earned.
, What is Alimony and how is it treated by both parties? - Correct Answers -It is
deductible by the Payer and included in income by the Receiver only if the instrument
was put in place before 2018. After 2019 it is not included or deducted by either party.
What if a former spouse makes "extra" payments to the other former spouse outside of
Alimony? - Correct Answers -it is only deductible if its included in the decree
Where do you report Alimony paid or recieved? - Correct Answers -On a Schedule 1
What type of payments are NOT Alimony? - Correct Answers -Child support and
property settlements
Is interest you receive on tax refunds taxable? - Correct Answers -Yes, interest on
refunds is considered taxable income
When do you pay the tax on interest in an installment sale? - Correct Answers -You pay
the tax on the interest in the year it was received.
What happens to US Savings Bond interest if you have Qualified Higher Education
Expenses in the same year? - Correct Answers -You may be able to exclude all or part
of the interest income - Not if you file MFS
Is interest income from US Treasury Bills, Notes and Bonds included on state returns? -
Correct Answers -No, It is subject to federal taxes but is exempt from all state and local
taxes.
Are life insurance procedes taxable to the beneficiary? - Correct Answers -No, they are
not taxable when received or deducted when they are paid.
Where is Taxable Interest Reported? - Correct Answers -Schedule B
Where is tax- EXEMPT Interest Reported? - Correct Answers -1040 Line 2a
Where are Royalties Reported? - Correct Answers -On Schedule E
If you are the owner of mineral rights or oil and gas wells, can you recover your
investment? - Correct Answers -Yes, you can recover your investment through the
Depletion Allowance
Where do you report the sale of mineral rights and oil or gas wells? - Correct Answers -
Sales are reported on a Schedule D
Are union unemployment benefits included in income? - Correct Answers -Yes, if paid
from your union dues they are considered income. If paid from a special union fund, you
only include amounts above your contributions.
