Question: 2. David files his tax return 75 days after the due date. Along with the return, David remits a check for $65,000. which is the

2. David files his tax return 75 days after the due date. Along with the return, David remits a check for $65,000. which is the balance of the tax owed. Disregarding the interest element, David's total failure to file and to pay penalties are:

a. $16,250 b. $9,750 c. $0 d. $10,725

4. Which court decision would carry the most weight?

a. Tax Court b. Court of Appeals c. District Court d. Supreme Court

Mary had the following transactions:
Salary	$70,000
Bank loan (proceeds used to buy personal auto)	15,000
Gambling Winnings	10,000
Interest from Bank of America Savings Account	1,000
Gift from Uncle	20,000
Mary's AGI is:

a. $66,000 b. $70,000 c. 81,000 d. $101,000

11.

John and Jill are married and under 65 years of age. During 20X2, they furnish more than half of the support of their 19-year old daughter, Samantha, who lives with them. She graduated from high school in May 20X2, and attended College from August 20X2 to December 20X2. Samantha earned $15,000 from a part-time job, most of which she spent on College expenses. John and Jill provide more than half the support for Samantha. John and Jill also provide more than half of the support of Greg, John's cousin, who lives with them. Greg earned $2,000 in 20X2. Jill's father, Bill, died on January 3, 20X2, at age 90. John and Jill provided for over half of Bill's support. Bill had no income. Bill did not live with John or Jill. How many dependents can Kyle and Liza claim?

a. 0 b. 1 c. 2 d. 3

16. Gloria purchased a U.S. Series EE savings bond for $638. The bond has a maturity value in 20 years of $2,000 and yields 4% interest. This is the first Series EE bond that Gloria has ever owned.

a. Gloria can defer all the interest income until the bond matures in 20 years. b. The interest on the bonds is not includable in taxable income. c. Gloria can report all of the $1,362 as a capital gain in the year it matures. d. Gloria must report $68.10[($2,000 - $638)/20] interest income each year she owns the bond.

21. The taxpayer's marginal federal and state tax rate is 30%. Which would the taxpayer prefer?

a. $1.40 in taxable income. b. $1.50 in taxable income c. $1.10 in tax-exempt income. d. $1.00 in tax-exempt income.

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