Tax Exam 1 Prep Questions and Answers (2026 – Updated) – 100% Solved
A married person with a dependent child may choose to file as head of household if it reduces
his or her tax liability. - ✔✔✔-False
Actual cost method for travel miles - ✔✔✔-All $ spent x % of business use
Albert and Louise, ages 66 and 64, respectively, filed a joint return for 2021. They provided all of
the support for their blind 19-year-old son, who had no gross income. They also provided the
total support of Louise's father, who is a citizen and life-long resident of Peru. What is the
amount of the credit for other dependents that Albert and Louise can claim? - ✔✔✔-$500
All of the following amounts are excluded from gross income, except:
a.Tips and gratuities
b.Scholarship grants for tuition
c.Gifts
d.Child support payments
e.Veterans' benefits - ✔✔✔-Ans: A
An unmarried taxpayer who maintains a household for a dependent child and whose spouse
died four years ago should file as: - ✔✔✔-Head of household
Arthur, age 19, is a full-time student at Gordon College and is a candidate for a bachelor's
degree. During 2021, he received the following amounts:
Tuition scholarship $2,400
Loan from college financial aid office $1,000
Cash support from parents $2,000
Ordinary cash dividend $200
Cash prize awarded from a contest $300
What is his adjusted gross income for 2021? - ✔✔✔-$500
, Tax Exam 1 Prep Questions and Answers (2026 – Updated) – 100% Solved
Barry is a self-employed attorney who travels to New York on a business trip during 2021.
Barry's expenses were as follows:
Airfare $550
Taxis $40
Restaurant meals $150
Lodging $350
How much may Barry deduct as travel expenses for the trip? - ✔✔✔-$1,090
Bob owns a rental property that he bought several years ago for $250,000. He has taken
depreciation on the house of $35,000 since buying it. He sells it in 2021 for $290,000. His selling
expenses are $12,000 for the year. What is Bob's realized gain on the sale? - ✔✔✔-$63,000
Brian is 60 years old, single, and legally blind. Brian supports his father, who is 88 years old and
blind, by paying the rent and other costs of his father's residence. What is the total standard
deduction amount that Brian should claim on his 2021 tax return? - ✔✔✔-$20,500
Choose the correct statement: - ✔✔✔-A. Membership dues to a golf club are deductible as long
as there is a business purpose.
B. In order to be deductible, dues and subscriptions must be related to the taxpayer's
occupation.
C. If a taxpayer does a lot of business travel, the taxpayer may deduct the amount paid for an
airline club membership.
D. If a financial planner becomes certified, then he/she may not deduct the Certified Financial
Planner (CFP) dues because it is not necessary to be certified in order to engage in the business
of being a financial planner.
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Answer: B
A married person with a dependent child may choose to file as head of household if it reduces
his or her tax liability. - ✔✔✔-False
Actual cost method for travel miles - ✔✔✔-All $ spent x % of business use
Albert and Louise, ages 66 and 64, respectively, filed a joint return for 2021. They provided all of
the support for their blind 19-year-old son, who had no gross income. They also provided the
total support of Louise's father, who is a citizen and life-long resident of Peru. What is the
amount of the credit for other dependents that Albert and Louise can claim? - ✔✔✔-$500
All of the following amounts are excluded from gross income, except:
a.Tips and gratuities
b.Scholarship grants for tuition
c.Gifts
d.Child support payments
e.Veterans' benefits - ✔✔✔-Ans: A
An unmarried taxpayer who maintains a household for a dependent child and whose spouse
died four years ago should file as: - ✔✔✔-Head of household
Arthur, age 19, is a full-time student at Gordon College and is a candidate for a bachelor's
degree. During 2021, he received the following amounts:
Tuition scholarship $2,400
Loan from college financial aid office $1,000
Cash support from parents $2,000
Ordinary cash dividend $200
Cash prize awarded from a contest $300
What is his adjusted gross income for 2021? - ✔✔✔-$500
, Tax Exam 1 Prep Questions and Answers (2026 – Updated) – 100% Solved
Barry is a self-employed attorney who travels to New York on a business trip during 2021.
Barry's expenses were as follows:
Airfare $550
Taxis $40
Restaurant meals $150
Lodging $350
How much may Barry deduct as travel expenses for the trip? - ✔✔✔-$1,090
Bob owns a rental property that he bought several years ago for $250,000. He has taken
depreciation on the house of $35,000 since buying it. He sells it in 2021 for $290,000. His selling
expenses are $12,000 for the year. What is Bob's realized gain on the sale? - ✔✔✔-$63,000
Brian is 60 years old, single, and legally blind. Brian supports his father, who is 88 years old and
blind, by paying the rent and other costs of his father's residence. What is the total standard
deduction amount that Brian should claim on his 2021 tax return? - ✔✔✔-$20,500
Choose the correct statement: - ✔✔✔-A. Membership dues to a golf club are deductible as long
as there is a business purpose.
B. In order to be deductible, dues and subscriptions must be related to the taxpayer's
occupation.
C. If a taxpayer does a lot of business travel, the taxpayer may deduct the amount paid for an
airline club membership.
D. If a financial planner becomes certified, then he/she may not deduct the Certified Financial
Planner (CFP) dues because it is not necessary to be certified in order to engage in the business
of being a financial planner.
Feedback Area
Answer: B
