FPQP® – Module 8 Baseline Test Knowledge Training
Questions and All Questions Accurately Answered Latest
2025/2026
Property taxes - correct answer These are imposed, usually by county governments,
on both real estate and other property, including automobiles and boats. These taxes
usually are based on the assessed value of the property.
Excise taxes - correct answer These are assessed by the federal government on
gasoline, alcohol, tires, and other targeted products.
Transfer taxes - correct answer These are imposed by both the federal and state
governments on certain estates or gifts.
Employment taxes. - correct answer These are federal government taxes, such as
Social Security and Medicare withholding under the Federal Insurance Contributions Act
(FICA) and the Self-Employment Tax.
Occupational privilege taxes. - correct answer These are imposed by many
municipalities. These taxes, sometimes known as a head tax, are actually fees charged
by the city for the right to work in that city and are imposed to help pay for the services
the city provides that are used by those who work there, such as city roads and bridges.
Schedule A - correct answer ITEMIZED DEDUCTIONS
SCHEDULE B - correct answer Interest and Ordinary Dividends
SCHEDULE C - correct answer Profit or Loss From Business
SCHEDULE D - correct answer Capital Gains and Losses
,SCHEDULE SE - correct answer Self-Employment Tax
HEAD OF HOUSEHOLD - correct answer Head of household. Generally, only
unmarried taxpayers can qualify as the head of a household. However, there is a
special rule—the abandoned spouse rule—that allows married taxpayers to be treated
as not married for tax purposes. Those who meet the abandoned spouse rule can file
using head-of-household status.
To qualify for head-of-household status, a taxpayer must be unmarried, pay over half
the cost of maintaining their home, and that home is the principal residence for more
than six months for either:
an unmarried child
a dependent married child
certain dependent relatives
Cheri is divorced. On January 1 of the current year, her 17-year-old daughter, Frances,
lives with her. She provides over 50% of the cost of maintaining the household where
they live. What is Cheri's filing status? - correct answer HEAD OF HOUSEHOLD
DEPDENDENT - correct answer - the person is related to the taxpayer (child, parent,
brother, aunt, daughter-in-law, etc.) or is a member of the household
-the person is not married and does not file a joint return
- the person's gross income was less than $4,300 in 2021 (a taxpayer's child under age
19, however, can have gross income over that amount and still pass this portion of the
test, as well as a child who is a full-time student and under age 24)
-the taxpayer provides over half of the support for the tax year
GROSS INCOME - correct answer salary (after any contributions to 401[k]s, 403[b]s,
etc.)
interest
dividends
, taxable refunds of state income tax
net business income
net capital gains
taxable IRA distributions
farm income
taxable Social Security benefits
EXCLUSIONS - correct answer child support received
alimony support received (if divorced finalized after December 31st, 2018)
qualified municipal bond interest
veterans' benefits
certain military benefits
workers' compensation received
gifts and most inheritances received
life insurance proceeds paid on a person's death
Section 139 qualified disaster relief payments per 2020 CARES Act
Capital Asset - correct answer property for personal use, including a residence,
vacation home, car, furniture, jewelry, and collections
property used as an investment, including land, stock, bonds, collectibles, and antiques
Basis - correct answer Basis is essentially the tax cost of an asset—the total amount
invested in an asset. Generally, if the asset was purchased, then the basis is the
amount paid for it, or its cost. This cost basis includes cash paid, the fair market value of
services provided to receive the property, and the fair market value of any property that
was exchanged for the property.
Adjusted Basis - correct answer the adjusted basis is the original basis plus or minus
certain items.
Questions and All Questions Accurately Answered Latest
2025/2026
Property taxes - correct answer These are imposed, usually by county governments,
on both real estate and other property, including automobiles and boats. These taxes
usually are based on the assessed value of the property.
Excise taxes - correct answer These are assessed by the federal government on
gasoline, alcohol, tires, and other targeted products.
Transfer taxes - correct answer These are imposed by both the federal and state
governments on certain estates or gifts.
Employment taxes. - correct answer These are federal government taxes, such as
Social Security and Medicare withholding under the Federal Insurance Contributions Act
(FICA) and the Self-Employment Tax.
Occupational privilege taxes. - correct answer These are imposed by many
municipalities. These taxes, sometimes known as a head tax, are actually fees charged
by the city for the right to work in that city and are imposed to help pay for the services
the city provides that are used by those who work there, such as city roads and bridges.
Schedule A - correct answer ITEMIZED DEDUCTIONS
SCHEDULE B - correct answer Interest and Ordinary Dividends
SCHEDULE C - correct answer Profit or Loss From Business
SCHEDULE D - correct answer Capital Gains and Losses
,SCHEDULE SE - correct answer Self-Employment Tax
HEAD OF HOUSEHOLD - correct answer Head of household. Generally, only
unmarried taxpayers can qualify as the head of a household. However, there is a
special rule—the abandoned spouse rule—that allows married taxpayers to be treated
as not married for tax purposes. Those who meet the abandoned spouse rule can file
using head-of-household status.
To qualify for head-of-household status, a taxpayer must be unmarried, pay over half
the cost of maintaining their home, and that home is the principal residence for more
than six months for either:
an unmarried child
a dependent married child
certain dependent relatives
Cheri is divorced. On January 1 of the current year, her 17-year-old daughter, Frances,
lives with her. She provides over 50% of the cost of maintaining the household where
they live. What is Cheri's filing status? - correct answer HEAD OF HOUSEHOLD
DEPDENDENT - correct answer - the person is related to the taxpayer (child, parent,
brother, aunt, daughter-in-law, etc.) or is a member of the household
-the person is not married and does not file a joint return
- the person's gross income was less than $4,300 in 2021 (a taxpayer's child under age
19, however, can have gross income over that amount and still pass this portion of the
test, as well as a child who is a full-time student and under age 24)
-the taxpayer provides over half of the support for the tax year
GROSS INCOME - correct answer salary (after any contributions to 401[k]s, 403[b]s,
etc.)
interest
dividends
, taxable refunds of state income tax
net business income
net capital gains
taxable IRA distributions
farm income
taxable Social Security benefits
EXCLUSIONS - correct answer child support received
alimony support received (if divorced finalized after December 31st, 2018)
qualified municipal bond interest
veterans' benefits
certain military benefits
workers' compensation received
gifts and most inheritances received
life insurance proceeds paid on a person's death
Section 139 qualified disaster relief payments per 2020 CARES Act
Capital Asset - correct answer property for personal use, including a residence,
vacation home, car, furniture, jewelry, and collections
property used as an investment, including land, stock, bonds, collectibles, and antiques
Basis - correct answer Basis is essentially the tax cost of an asset—the total amount
invested in an asset. Generally, if the asset was purchased, then the basis is the
amount paid for it, or its cost. This cost basis includes cash paid, the fair market value of
services provided to receive the property, and the fair market value of any property that
was exchanged for the property.
Adjusted Basis - correct answer the adjusted basis is the original basis plus or minus
certain items.
