Question 1 of 75
In general, what is the basis of property inherited from a decedent?
A. The decedent's adjusted basis in the property on the date of death or the alternative
valuation date.
B. The fair market value of the property on the date of death or the alternative
valuation date.
C. The higher of the decedent’s adjusted basis or the fair market value on the date of
death or the alternative valuation date.
D. The decedent's original purchase price of the property.
Answer: The correct answer is B.
Explanation: The fair market value of the property on the date of death or the alternative
valuation date. When property is inherited from a decedent, the basis of the property is
generally the fair market value of the property on the date of the decedent's death or the
alternative valuation date.
Question 2 of 75
Reverend Grainger receives a rental allowance from her employing church. The allowance
is excluded from income.
Reverend Grainger also has both self-employment income and unreimbursed expenses
related to her ministry.
Which of the following statements is most accurate?
A. Reverend Grainger must allocate part of the expenses to the excluded allowance.
B. The excluded allowance covers the expenses. Nothing is deductible.
C. The expenses can be claimed as an adjustment to income.
D. Reverend Grainger does not need to claim any of her income.
Answer: The correct answer is A.
Explanation: Reverend Grainger must allocate part of the expenses to the excluded
allowance. When a taxpayer receives a rental allowance from an employer that is excluded
from income, the taxpayer must allocate a portion of the expenses related to their ministry
to the excluded allowance.
Question 3 of 75
Which of the following taxpayers is required to file a Form 8862 to claim certain credits
after disallowance?
A. Janusz and Beata because their Child and Dependent Care Credit was disallowed due
to a math error.
B. Giovanni because his American Opportunity Tax Credit was disallowed in 2021, but
he now meets all the requirements for the AOTC and wants to claim the credit on his
2022 tax return.
C. Monica and Rish because they received a final determination that their Earned
Income Credit was disallowed in 2021 due to reckless or intentional disregard of the
rules.
D. Ali and Mohammed because they received a final determination that their Child Tax
Credit was disallowed in 2021 due to fraud.
In general, what is the basis of property inherited from a decedent?
A. The decedent's adjusted basis in the property on the date of death or the alternative
valuation date.
B. The fair market value of the property on the date of death or the alternative
valuation date.
C. The higher of the decedent’s adjusted basis or the fair market value on the date of
death or the alternative valuation date.
D. The decedent's original purchase price of the property.
Answer: The correct answer is B.
Explanation: The fair market value of the property on the date of death or the alternative
valuation date. When property is inherited from a decedent, the basis of the property is
generally the fair market value of the property on the date of the decedent's death or the
alternative valuation date.
Question 2 of 75
Reverend Grainger receives a rental allowance from her employing church. The allowance
is excluded from income.
Reverend Grainger also has both self-employment income and unreimbursed expenses
related to her ministry.
Which of the following statements is most accurate?
A. Reverend Grainger must allocate part of the expenses to the excluded allowance.
B. The excluded allowance covers the expenses. Nothing is deductible.
C. The expenses can be claimed as an adjustment to income.
D. Reverend Grainger does not need to claim any of her income.
Answer: The correct answer is A.
Explanation: Reverend Grainger must allocate part of the expenses to the excluded
allowance. When a taxpayer receives a rental allowance from an employer that is excluded
from income, the taxpayer must allocate a portion of the expenses related to their ministry
to the excluded allowance.
Question 3 of 75
Which of the following taxpayers is required to file a Form 8862 to claim certain credits
after disallowance?
A. Janusz and Beata because their Child and Dependent Care Credit was disallowed due
to a math error.
B. Giovanni because his American Opportunity Tax Credit was disallowed in 2021, but
he now meets all the requirements for the AOTC and wants to claim the credit on his
2022 tax return.
C. Monica and Rish because they received a final determination that their Earned
Income Credit was disallowed in 2021 due to reckless or intentional disregard of the
rules.
D. Ali and Mohammed because they received a final determination that their Child Tax
Credit was disallowed in 2021 due to fraud.
