Answer all questions and problems appearing on this examination under rules governing federal income taxation. Unless instructed otherwise, assume the relevant year to be$2023.$

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All final answers have been rounded to the nearest $$10.$

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$1.$ Corp. A purchases and pays $100\%$ of the premium cost for life insurance on all of its employees. Employee Anne Able, age $56,$ has a policy providing $$40,000$ of coverage. Assume that Corp. A pays $$240\mathrm{.}00$ actual premium cost for Anne's policy for the year. Based on the above data, Corp. A will include what amount of additional taxable income on Anne's W$-2$ for the year?

A$$ $$210$

B$260$

C$240$

D$0$

E$$ None of the above

$2.$ During $20$x$4,$ Donna Davis $($adjusted gross income of $$70,000\}$ paid the amounts listed below. Real estate tax $($principal residence$)$ $$4,000$

Real estate tax $($vacation home$)$ Real estate tax $($a $2$d vacation home$)$ State income tax

City sales tax

State sales tax $($paid to another state while on vacation$)$ State gasoline tax $($personal vehicle$)$

Dog license

Real estate tax on residence belonging to Taxpayer's mother

$1,000$

$900$

$4,500$

$2,800$

$210$

$400$

$20$

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$700$

What amount should Donna claim as an itemized deduction for taxes on her $20$x$4$ Form $1040?$ A$$ $$11,100$

B$9,500$

C$13,410$

D$10,400$

E$$ None of the above

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$3.$ Which, if any, of the listed taxes are not allowable as an itemized deduction?

A$.$ Federal gift tax

B$.$ Federal gasoline excise tax

C$.$ Virginia inheritance tax

D$.$ All are deductible as itemized deductions

E$.$ None are deductible as itemized deductions

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$4.$ Which of the following expenditures would not be allowed as an itemized deduction? If more than one would not be allowed, select either Dor E$.$

A$.$ A speeding ticket only

B$.$ An expense incurred while operating an illegal gambling business only

C$.$ A government imposed penalty only

D$.$ Neither A nor C would be allowed

E$.$ None of the above $--$ neither A$,$ B$,$ nor C would be allowed

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$5.$ Which of the listed interest expenses can be deducted as an itemized deduction?

A$.$ Home equity loan interest on funds borrowed for tuition for the taxpayers child

B$.$ Personal credit card interest

C$.$ Points paid upon refinancing a loan on rental property

D$.$ Investment interest on money borrowed to purchase municipal bonds

E$.$ None of the above may be deducted as an itemized deduction

$6.$ A taxpayer using the standard mileage method for trade or business use of an automobile is permitted to increase the$$ computed amount by which of the listed actual expenditure amounts?

A State and local property tax B Gasoline

C$$ Insurance on the vehicle

D$$ All of the listed costs may be deducted in addition to the computed amount

E$$ None of the listed costs may be deducted in addition to the computed amount

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$7.$ Which of the listed individuals will qualify as a dependent of Taxpayer?

A$$ A twenty$-$six year old son who earned $$5,100$ between January $1$ and March $17,$ but was unemployed for the remainder of the year

B$$ A seven year old niece supported by Taxpayer, but who lived with Taxpayer's parents all year

C$$ The five year old son of Taxpayer's best friend who lived with Taxpayer all year while the child's parents were in prison

D$$ A twenty$-$one year old married daughter who was supported by Taxpayer, but who filed a joint return with her husband. Assume that the daughter earned

$$14,000$ of income and the joint return reported a $$400$ income tax liability.

E$$ None of the above