NOTE: All questions will be based on Tax Cuts & Jobs Act (TCJA) and tax returns prepared after 2017

26) If property is involuntarily converted into similar property, the basis and holding period of the converted property carry over to the basis and holding period of the replacement property.

A) TRUE

B) FALSE

27) For purposes of the computation of AMT, the standard deduction is allowed.

A) TRUE

B) FALSE

28) Medical expenses in excess of 7.5% of AGI are deductible when computing AMT on a tax return prepared in 2018.

Answer:

A) TRUE

B) FALSE

29) In computing AMTI, tax preference items (e.g. intangible drilling costs and depletion) are

A) excluded.

B) added only.

C) subtracted only.

D) either added or subtracted.

30) In computing AMTI, adjustments are

A) limited.

B) added only.

C) subtracted only.

D) either added or subtracted.

31) If an individual is liable for self-employment tax, a portion of the self-employment tax is

A) a for AGI deduction from gross income.

B) from AGI as an itemized deduction.

C) a Schedule C business expense.

D) nondeductible.

32) Hong earns $127,400 in her job as a physician's assistant. She also has her own business selling cosmetics. This business generated $10,000 of earnings. What is Hong's self-employment tax for 2018?

A) $290

B) $1,530

C) $0

D) $21,022