A taxpayer cashes in a certificate of deposit early and

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Reference no: EM13483178

1 Which of the following is taxable?

A. Refunds of state income tax claimed in the prior year as an itemized deduction

B. A $5,000 gift

C. Compensatory damages for physical injuries

D. A $10,000 inheritance

2 Which of the following do not qualify as higher education expenses?

A. Tuition

B. Books

C. Computer not required for admission

D. Reasonable room and board

3 Which of the following portions of a scholarship would be taxable?

A. Tuition

B. Fees

C. Books and course-required supplies

D. Room and board

4 Which type of debt cancellation is taxable in 2012?

A. The discharge of up to $2 million of qualified resident indebtedness

B. Forgiveness of student loan due to taxpayer agreeing to work in a rural area.

C. Debt cancelled by the court in a Title 11 bankruptcy

D. Cancellation of credit card debt

5 A taxpayer cashes in a certificate of deposit early and incurs a penalty. How can the penalty be deducted from income?

A. Net against the interest on Line 8A of Form 1040

B. It can be deducted on Schedule A

C. Interest penalties are nondeductible

D. Line 30 of Form 1040

6 Which US Savings bonds no longer earn interest?

A. Series I Bonds

B. Series E Bonds

C. Series EE Bonds

D. Municipal Bonds

7 Cory received $10,000 in disability benefits in 2012 from a disability plan he contributed to with after-tax dollars. He is single and his taxable income for 2012 is $45,000 including his disability income. What is the maximum tax bracket that the disability benefits could be taxed at?

A. 0 percent

B. 10 percent

C. 15 percent

D. 25 percent

8 Katelyn, a 33-year-old doctor (not a key employee), is provided with $150,000 of group life insurance in 2012. How much would Katelyn have to pay for her 2012 excess group life insurance benefit?

A. $8,000

B. $800

C. $960

D. $1,080

9 Which of the following types of dividends are paid from a corporation's current accumulated earnings and profits?

A. Qualified dividends

B. Non-taxable

C. Capital gains distributions

D. Interest

10 In what box is taxpayers' federal tax withholding shown on their W-2?

A. 19

B. 17

C. 1

D. 2

Reference no: EM13483178

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