True/False
Indicate whether the
statement is true or false.
|
|
|
1.
|
The AMT calculated using the
indirect method will produce a different amount than the AMT calculated using the direct
method.
|
|
|
2.
|
AMT adjustments can be positive
or negative, whereas AMT preferences are always positive.
|
|
|
3.
|
Unless circulation expenditures are amortized over a three-year period for
regular income tax purposes, there will be an AMT adjustment.
|
|
|
4.
|
If Abby’s alternative
minimum taxable income exceeds her regular taxable income, she will have an alternative minimum
tax.
|
|
|
5.
|
The phaseout of the AMT exemption amount for a taxpayer filing as a head of
household both begins and ends at a higher income level than it does for a single taxpayer
|
|
|
6.
|
Taxation
includes:
1. Alternative Minimum Tax
2. Credit for Prior Year Minimum Year
3. Penalties
and Exceptions on Premature Distributions from Qualified Plans and IRSs Wednesday
4.Household
Employees
5.Underpayment Penalties and Interest
6.Conditions for Filing a Claim for Refund (
e.g., amended returns)
7.Self Employment Tax
8.Excess Social Security
Withholding
9.Tax Provisions for Members of the Clergy
|
|
|
7.
|
The purpose of the AMT is to accomplish a more
equitable distribution of the tax burden among taxpayers.
|
|
|
8.
|
Form 843 is used if your
claim or request involves:
a refund of one of the taxes (other than income taxes or an
employer’s claim for FICA tax, RRTA tax, or income tax withholding) or a fee, shown
on line 3,
|
|
|
9.
|
One of the many benefits of
saving for a child’s future college education is with a 529 plan. Contributions are considered
gifts for tax purposes. In 2019 gifts totaling up to $10,000 per individual will qualify for the
annual gift tax exclusion.
|
|
|
10.
|
The Estate Tax is a tax on your
right to transfer property at your death. It consists of an accounting of everything you own or have
certain interests in at the date of death (Refer to Form 706. The fair market value of these items is
used, not necessarily what you paid for them or what their values were when you acquired them. The
total of all of these items is your "Gross Estate." The includible property may consist of
cash and securities, real estate, insurance, trusts, annuities, business interests and other
assets.
|
|
|
11.
|
Divorced
persons. If you are divorced under
a final decree by the last day of the year, you are considered unmarried for the whole
year.
|
|
|
12.
|
Divorce and
remarriage. If you obtain a
divorce for the sole purpose of filing tax returns as unmarried individuals, and at the time of
divorce you intend to and do, in fact, remarry each other in the next tax year, you and your spouse
must file as seperate individuals in both years.
|
|
|
13.
|
Estimated tax is the method used to pay tax on income that
is not subject to withholding.
|
|
|
14.
|
Estimated tax is used to pay
only self-employment tax.
|
Multiple Choice
Identify the
choice that best completes the statement or answers the question.
|
|
|
15.
|
Which of the following statements is correct?
a. | If the tentative minimum tax exceeds the regular income tax liability, the AMT is
$0. | d. | Only a. and c. are correct. | b. | The exemption amount decreases as AMTI
increases. | e. | a., b., and c.
are correct. | c. | The AMT tax rate for an individual taxpayer can be as high as
26%. |
|
|
|
16.
|
Which of the
following amounts generally produce positive AMT adjustments?
a. | Real property taxes deduction. | d. | Only a. and b. are
correct. | b. | Personal exemption deduction. | e. | a., b., and c. are correct. | c. | Charitable
contribution deduction. |
|
|
|
17.
|
With regard to Estimated Tax for Individuals.
a. | Any
individual who has estimated tax of $1,000 or more and whose
withholding does not equal or exceed the required annual payment must make quarterly
payments.
a. Penalty for underpayment. | c. | Payment must equal (1)
Ninety percent of the tax shown on the current year’s
return. or
(2)One hundred percent of the tax shown on the preceding
year’s return | b. | Only A is correct. | d. | A and B are
correct. |
|
|
|
18.
|
A seller of any age who has
owned and used a home as a principal residence for at least two of the last five years can exclude
from income up to $250,000 of gain ($500,000 for joint filers) on the sale of the residence.
a. |
This exclusion may only be used once
every three years |
c. |
This exclusion may
only be used once every two years | |
b. | C is Correct |
d. | Neither are
Correct |
|
|
|
19.
|
You are an injured spouse if
a. | you filed a joint tax return and all
of your portion of the overpayment was, or is expected to be applied (offset) to your spouse’s
legally enforceable past-due federal tax, state income tax, state unemployment compensation debts,
child or spousal support, or a federal nontax debt, such as a student loan.
| c. | you filed a joint tax return and if a portion of your portion of the
overpayment was, or is expected to be applied (offset) to your spouse’s legally enforceable
past-due federal tax, state income tax, state unemployment compensation debts, child or spousal
support, or a federal nontax debt, such as a student loan.
| b. | Both are
correct | d. | None are
correct |
|
|
|
20.
|
To qualify for innocent spouse
relief, you must meet all of the following conditions except.
a. | You must have filed a joint return
which has an understated tax.
| c. | You must establish that at the time you signed the joint return, you did not
know, and had no reason to know, that there was an understated tax.
| b. | You must request relief within 4 years after the date on
which the IRS first began collection activity against you after July 22, 1998.
| d. | You must establish that at the time you signed the joint return, you did not
know, and had no reason to know, that there was an understated tax.
|
|