Tax Level 2 - Study Pre Assessment Exam Questions with
Answers
1.Without considering any temporary expansions (increases) in the meal
deduction, what is the general rule for meals deduction for trucker's
subject to the Department of Transportation's "hours of service" limits?:
*80%
50%
100%
0%
2.For an NSO, the bargain element is reported as ordinary income.:
*True False
Visit the Help Panel for more information on non-qualified stock options.
*The bargain element is taxed as compensation, which means you'll nee
to pay ordinary income tax on that amount
https://turbotax.intuit.com/tax-tips/investments-and-taxes/non-qualified-
stock-op- tions/L8zsxRi7B
3.A taxpayer is considered to use a dwelling as a residence if they use the
property for personal purposes during the tax year for more than the greater
of 14 days or 10% of the total days they rent it to others at a fair rental price.:
*True False
*You're considered to use a dwelling unit as a residence if you use it for
personal purposes during the tax year for a number of days that's more
than the greater of: 14 days, or. 10% of the total days you rent it to
others at a fair rental price.
4.Which of the following items are nondeductible business expenses:
*Illegal activities
$15 grocery store gift card
*Broadway Show
*$1,000 gift card
*Personal expenses
5.When calculating the depreciable basis of a rental property, the
taxpayer should not include the value of the land: *True
False
6.A Qualified Charitable Distribution can satisfy only part of your
required minimum distribution for the year: True
,*False
7.Which of the following statements are true?
Select all that apply
-Traditional IRAs are the same as 401(k)s
-There are income limits for Roth IRAs.
-Anyone that is working and/or has earned income to contribute to a -Tradi-
tional IRA regardless of age
-Nondeductible IRA contributions have no income limits: Select all that
apply: Traditional IRAs are the same as 401(k)s
*There are income limits for Roth IRAs.
*Anyone that is working and/or has earned income to contribute to a
Traditional IRA regardless of age
*Nondeductible IRA contributions have no income limits
8.What is the Qualified Business Income Deduction also known as:
*Section 199A
C corporation
deduction Qualified
benefits
A 50% deduction
9.Filing status is determined by your marital status as of December 31 of
the tax year.: *True
False
10.When an individual converts a non-deductible IRA contribution to a
Roth IRA, the earnings are taxable.: *True
False
11.Schedules K-2 and K-3 (Form 1065) replace which lines on the
K1? 19
16
17
20: Schedules K-2 and K-3 (Form 1065) replace which lines on
the K1? 19
*1
6
17
*20
12.Taiwan purchased stock twelve years ago for $5,000. He sold it
yesterday for $2,000,000. What is Taiwan's adjusted basis of his stock?
$5,000
, $2,000,000
$2,005,000
1,995,000:
*$5,000
$2,000,000
$2,005,000
1,995,000
- Adjusted Basis -records the difference
13.On January 2 of the current year, Carmen and Bianca contributed cash
equally to form the CB partnership. Carmen and Bianca share in the profits
and losses in a ratio of 75% and 25% respectively. The partnership's
ordinary income for the year was $10,000. What is Carmen's share of taxable
income for the year?: $0
$5,000
$10,000
*$7,500
14.Since most taxpayers no longer take advantage of Itemized Deductions
due to the increase in the standard deduction, 90% of taxpayers are not
able to deduct their charitable contributions.: True
*False
15.Vicki inherited her Mom's home and decided to use it as a short-term
rental to tourists visiting the area.
The average renter is there for just four days and Vicki tries to make their sta
as stress-free as possible by laundering the sheets, making the beds, and
cleaning it each day.
Schedule D is the form that Vicki would report the income and expenses
on.: True
*False
16.Carmelita rents the spare bedroom in her home. Which of the
following expenses can Carmelita deduct?
-Repairs to the bathroom in the spare bedroom.
-Her only phone line in the house that the renter uses.
Answers
1.Without considering any temporary expansions (increases) in the meal
deduction, what is the general rule for meals deduction for trucker's
subject to the Department of Transportation's "hours of service" limits?:
*80%
50%
100%
0%
2.For an NSO, the bargain element is reported as ordinary income.:
*True False
Visit the Help Panel for more information on non-qualified stock options.
*The bargain element is taxed as compensation, which means you'll nee
to pay ordinary income tax on that amount
https://turbotax.intuit.com/tax-tips/investments-and-taxes/non-qualified-
stock-op- tions/L8zsxRi7B
3.A taxpayer is considered to use a dwelling as a residence if they use the
property for personal purposes during the tax year for more than the greater
of 14 days or 10% of the total days they rent it to others at a fair rental price.:
*True False
*You're considered to use a dwelling unit as a residence if you use it for
personal purposes during the tax year for a number of days that's more
than the greater of: 14 days, or. 10% of the total days you rent it to
others at a fair rental price.
4.Which of the following items are nondeductible business expenses:
*Illegal activities
$15 grocery store gift card
*Broadway Show
*$1,000 gift card
*Personal expenses
5.When calculating the depreciable basis of a rental property, the
taxpayer should not include the value of the land: *True
False
6.A Qualified Charitable Distribution can satisfy only part of your
required minimum distribution for the year: True
,*False
7.Which of the following statements are true?
Select all that apply
-Traditional IRAs are the same as 401(k)s
-There are income limits for Roth IRAs.
-Anyone that is working and/or has earned income to contribute to a -Tradi-
tional IRA regardless of age
-Nondeductible IRA contributions have no income limits: Select all that
apply: Traditional IRAs are the same as 401(k)s
*There are income limits for Roth IRAs.
*Anyone that is working and/or has earned income to contribute to a
Traditional IRA regardless of age
*Nondeductible IRA contributions have no income limits
8.What is the Qualified Business Income Deduction also known as:
*Section 199A
C corporation
deduction Qualified
benefits
A 50% deduction
9.Filing status is determined by your marital status as of December 31 of
the tax year.: *True
False
10.When an individual converts a non-deductible IRA contribution to a
Roth IRA, the earnings are taxable.: *True
False
11.Schedules K-2 and K-3 (Form 1065) replace which lines on the
K1? 19
16
17
20: Schedules K-2 and K-3 (Form 1065) replace which lines on
the K1? 19
*1
6
17
*20
12.Taiwan purchased stock twelve years ago for $5,000. He sold it
yesterday for $2,000,000. What is Taiwan's adjusted basis of his stock?
$5,000
, $2,000,000
$2,005,000
1,995,000:
*$5,000
$2,000,000
$2,005,000
1,995,000
- Adjusted Basis -records the difference
13.On January 2 of the current year, Carmen and Bianca contributed cash
equally to form the CB partnership. Carmen and Bianca share in the profits
and losses in a ratio of 75% and 25% respectively. The partnership's
ordinary income for the year was $10,000. What is Carmen's share of taxable
income for the year?: $0
$5,000
$10,000
*$7,500
14.Since most taxpayers no longer take advantage of Itemized Deductions
due to the increase in the standard deduction, 90% of taxpayers are not
able to deduct their charitable contributions.: True
*False
15.Vicki inherited her Mom's home and decided to use it as a short-term
rental to tourists visiting the area.
The average renter is there for just four days and Vicki tries to make their sta
as stress-free as possible by laundering the sheets, making the beds, and
cleaning it each day.
Schedule D is the form that Vicki would report the income and expenses
on.: True
*False
16.Carmelita rents the spare bedroom in her home. Which of the
following expenses can Carmelita deduct?
-Repairs to the bathroom in the spare bedroom.
-Her only phone line in the house that the renter uses.
