Federal Income Tax MCQ Questions Answers

1. Which of the following statements with respect to an S corporation is false?

2. Using tax information from prior years is referred to as a:

3. The accounting system used for tax purposes has a:

4. How long after the close of a tax period must a business file its tax return, if it does not file an extension form?

5. Gain on a 1031 exchange is recognized.

6. What is the penalty for excess contributions made to an IRA account in a single tax year?

7. If a disability pension is reported on a 1099-R and the recipient is under the organization's minimum retirement age, which line of Form 1040 should it appear on?

8. Which of the following is a tax deductible contribution by the donor? Assume all recipients are qualified charities.

9. Which of the following tests is NOT to claim a dependency exemption for your child:

10. Which of the following related parties can recognize a loss on the sale or exchange of an asset between themselves for tax purposes?

11. The form showing income from gambling winnings is referred to as a:

12. Which qualifies as a 1031 exchange?

13. Section 179 Depreciation cannot be deducted in the current year when:

14. Which of the following statements are false?

15. An S corporation is generally required to use the accrual method of accounting.

16. Which of the following is NOT deductible for moving expenses?

17. The documentation provided for real estate sales is referred to as a:

18. For start-up expenses incurred, taxpayers are allowed to deduct up to what dollar amount for expenditures in the taxable year in which the business begins?

19. Which of the following would be deducted by an individual taxpayer directly on Schedule A of the Form 1040 as an itemized deduction?

20. Which of the following statements is NOT true regarding tax benefits for education?

21. Which of the following conditions does NOT prevent you from receiving earned income credit?

22. Which form is a home office reported on?

23. The normal distribution code for IRA or pension income is:

24. Which of of the following is allowable itemized deduction?

25. Home Office Deduction on Schedule C is allowed:

26. Which expense can be deducted on real estate held as an investment, but not on real estate held as a primary residence?

27. Gain on a 1031 exchange is recognized to the extent of boot.

28. Which expenditure will you be able to use to reduce the amount that you reports as adjusted gross income (AGI)?

29. Depreciation for tax purposes is:

30. Steve wants to claim his son as a dependent on his tax return. His son, Mark, is 21 years old and attends a community college full-time. Can Steve claim his son as a dependent? If so, until what age can Steve continue to claim his son?

31. What is the purpose of form 7004?

32. Which of the following items cannot be itemized?

33. When contributing to an IRA, what is the maximum amount a person under the age of 50 can contribute per tax year, assuming the individual's income is $45,000?

34. If you are married filing jointly for year 2011 and have itemized deduction of $10,000 would you claim itemized or standard deduction?

35. Capital Gains are reported under which Schedule

36. Lloyd is a CPA who prepares tax returns. Eddie, an Enrolled Agent, also prepares taxes. If both men submit form 2848 (Power of Attorney) for their clients, and indicate they can receive their client's refund check, who is authorized to cash or endorse the check?

37. Non-cash charitable contributions over $___ require additional details:

38. Which of the following items is not deductible?

39. How much can you take as a real-estate loss on an individual return?

40. Municipal bond interest is:

41. The amount of Social Security income that is taxable is dependent on how much other taxable income you have.

42. Contibutions to a traditional IRA are

43. Joe deposits $10,000 in a savings account. He is supposed to leave the money there for one year and will receive $11,000. He is forced to take the money out of the account early. The interest on the day of withdrawal was computed as $710. However, he was charged a penalty of $200 because of the early withdrawal and only received $10,510. Which of the following is true?

44. True or False: Alimony Received is taxable

45. Which schedule is used to report business income?

46. Which income is non-taxable income?

47. Which of the following is NOT a filing status?

48. If itemized deductions exceed the standard deduction

49. Should gambling winnings be reported on the tax return?

50. The following professionals can represent clients before any office of the IRS:

51. ______ may be deducted from Gross Income.

52. IRS stands for

53. Kathy is divorced and her unmarried 27-year old son lived with her all of 2011. She paid all the household expenses and provided over half of her son's support. What is Kathy's filing status ?

54. Deductible work-related educational expenses do NOT include:

55. In filing a partnership income tax return, what is the purpose of Schedule K?

56. The statement displaying wages from a job is called a ______?