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| 1 | |
Student loan interest is deductible only by the person who actually attended the educational institution. |
| | A) | True |
| | B) | False |
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| 2 | |
A Health Savings Account (HSA) is a tax exempt savings account to pay for qualified medical expenses. |
| | A) | True |
| | B) | False |
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| 3 | |
Unreimbursed qualifying moving expenses are an above the line deduction for 2007. |
| | A) | True |
| | B) | False |
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| 4 | |
To qualify for the moving expense deduction, an employee must change job sites, move a required distance, and change employers. |
| | A) | True |
| | B) | False |
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| 5 | |
For self-employed taxpayers, ¾ of the amount of self-employment taxes are deductible as an above the line deduction. |
| | A) | True |
| | B) | False |
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| 6 | |
Under a divorce agreement executed in 2007, periodic payments of either cash or property must be made at regular intervals to be deductible as alimony. |
| | A) | True |
| | B) | False |
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| 7 | |
If a divorce agreement executed in 2007 specifies that a portion of the amount of an alimony payment is contingent upon the status of a child, that portion is considered to be a child support payment. |
| | A) | True |
| | B) | False |
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| 8 | |
Madison is a teacher at a parochial elementary school. If she spends $600 on art supplies for her classes, $250 of this amount can be claimed as a deduction for AGI. |
| | A) | True |
| | B) | False |
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| 9 | |
The Educator Expense deduction is available to community college and university professors. |
| | A) | True |
| | B) | False |
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| 10 | |
The Qualified Tuition and Fees deduction is $4,000 for all eligible taxpayers. |
| | A) | True |
| | B) | False |
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| 11 | |
For 2007, taxpayers are eligible to take a student loan interest deduction of up to: |
| | A) | $3,000 |
| | B) | $2,800 |
| | C) | $2,500 |
| | D) | $2,150 |
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| 12 | |
In 2003 through 2006, Shannon borrowed a total of $35,000 for higher education expenses on a qualified education loans while supporting herself with a full-time job. In 2007, she had modified adjusted gross income of $50,000. The first year interest on the loan was $850. The amount that Shannon can claim on her tax return is: |
| | A) | $0 |
| | B) | $425 |
| | C) | $640 |
| | D) | $850 |
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| 13 | |
Qualified education expenses for the purpose of deductible student loan interest include expenses for: |
| | A) | Tuition and fees |
| | B) | Books |
| | C) | Room and board |
| | D) | All of the above |
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| 14 | |
For 2007, the maximum deductible and annual out of pocket expenses for family coverage on a High Deductible Health Plan for a Health Savings Account is: |
| | A) | $11,050 |
| | B) | $11,000 |
| | C) | $10,500 |
| | D) | $10,000 |
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| 15 | |
Employer contributions to fund an eligible Health Savings Account (HSA) are: |
| | A) | Always deductible |
| | B) | Only deductible if they are a dollar for dollar match to employee contributions |
| | C) | Only deductible if they are less than the employee contributions |
| | D) | Never deductible |
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| 16 | |
Which of the following is not deductible as a moving expense? |
| | A) | The cost of moving household goods |
| | B) | Lodging for household members during the move. |
| | C) | Transportation expenses during the move |
| | D) | All of the above are deductible as moving expenses |
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| 17 | |
Due to a company consolidation, Rob transfers from Boston to San Diego. Under a new job description, he is reclassified from department manager to a staff member. His moving expenses, which are not reimbursed, are as follows:
| Transportation | $1,200 | | Meals | 300 | | Lodging | 400 | | Cost of moving household goods | 4,000 | | Pre-move house hunting costs | 2,500 |
Rob's deductible moving expense is: |
| | A) | $1,900 |
| | B) | $4,400 |
| | C) | $5,600 |
| | D) | $8,400 |
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| 18 | |
Which of the following expenses does not qualify as a moving expense? |
| | A) | Lodging |
| | B) | Travel expenses |
| | C) | House hunting expenses |
| | D) | Transportation of household goods |
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| 19 | |
The for AGI deduction for the self-employment tax is based upon: |
| | A) | a total of 15.3% of FICA taxes |
| | B) | the gross earnings of the business |
| | C) | filing status |
| | D) | a total of 7.65% of FICA taxes |
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| 20 | |
As a for AGI deduction, the expense for self-employed health insurance premiums: |
| | A) | Is never limited |
| | B) | Can only be limited by the amount of net earnings of the business |
| | C) | Can only be limited by the availability of other health insurance coverage |
| | D) | Is limited by both b and c |
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| 21 | |
What percentage of medical insurance payments are not deductible by self-employed taxpayers as a deduction for adjusted gross income on their 2007 tax returns? |
| | A) | 0% |
| | B) | 20% |
| | C) | 30% |
| | D) | 50% |
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| 22 | |
Jena is a self-employed fitness trainer who had net earnings from self-employment of $23,500. She paid $525 per month for health insurance over the last year. Jena is entitled to a for AGI deduction for health insurance of: |
| | A) | $0 |
| | B) | $5,250 |
| | C) | $6,300 |
| | D) | $6,500 |
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| 23 | |
Which of the following is not a requirement for an alimony deduction? |
| | A) | The payments must be in cash. |
| | B) | The payments must cease upon the death of the payee. |
| | C) | The payee must have a dependent child. |
| | D) | The payor and payee must not live in the same household at the time of the payments. |
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| 24 | |
Rick and Lenora were granted a divorce in 2006. In accordance with the decree, Rick made the following payments to Lenora in 2007:
Child support payments contingent on the age of the child $4,000
Annual cash payments other than child support $6,000
How much should Lenora include in her 2007 taxable income as alimony? |
| | A) | $10,000 |
| | B) | $6,000 |
| | C) | $4,000 |
| | D) | $0 |
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| 25 | |
Under the terms of a divorce agreement, Bev was to pay her husband Leon $4,000 per month in alimony and $1,500 per month in child support. For a twelve-month period, what is the amount that Bev can deduct from gross income and Leon must include in gross income: |
| | A) | $0 |
| | B) | $18,000 |
| | C) | $48,000 |
| | D) | $66,000 |
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| 26 | |
Mike and Karen were divorced. Their only marital property was a personal residence with a fair market value of $1.5 million and a cost of $575,000. Under the terms of the divorce agreement, Mike would receive the house and Mike would pay Karen $125,000 each year for 5 years, or until Karen's death, whichever should occur first. Mike and Karen were not living together when the payments were made by Mike. Mike paid the $625,000 to Karen over the five-year period. Mike's recognized gain from the transfer of the house to him is: |
| | A) | $0 |
| | B) | $575,000 |
| | C) | $925,000 |
| | D) | $1,500,000 |
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| 27 | |
Which of the following items is not tax deductible as an Educator Expense? |
| | A) | Books |
| | B) | Home schooling expenses |
| | C) | Computers and software |
| | D) | Supplies |
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| 28 | |
The deductible amount for expenses under the Educator Expense deduction is limited to |
| | A) | $100 |
| | B) | $150 |
| | C) | $200 |
| | D) | $250 |
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| 29 | |
Deductible expenses under the Tuition and Fess deduction do not include: |
| | A) | Student activity fees |
| | B) | Tuition |
| | C) | Student insurance |
| | D) | Supply fee charged by the school |
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| 30 | |
The amount of the Tuition and Fees deduction is: |
| | A) | $4,000 |
| | B) | phased-out for AGI of $65,000 to $135,000 for married, filing jointly |
| | C) | $0 for married filing separately |
| | D) | both b and d |
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