Question 6 of 75.

When Lorraine sent her son Aldan to college, she purchased a house near campus for $110,000. Empty lots in the area sold for approximately $10,000 at the time. After Aidan graduated, Lorraine decided to keep the house for use as a rental. The fair market value at the time of the conversion was $171,000, and the price of the land had risen to $20,000. What is the basis for depreciation of the house? $

90,000 $

100,000 $

110,000 $

171,000

Question 10 of 75.

Which of these cases would be subject to the "kiddie tax"?

Mina, age 12, earned $800 in dividends, with no other income.

Jordan, age 15, worked as a lifeguard all summer and earned $2,800 with no other income.

Bophy, age 14, earned $1,000 in interest and had a $1,800 royalty from a family oil well. She had no other income.

Victor, age 19, is taking a year off before starting college, He received $4,200 in dividends with no other income.

Question 12 of 75.

Carsten converted $1,000 into Bitcoin in November 2020. In October 2021, when the value of his holding had increased to $2,500, Carsten decided to purchase a watch using Bitcoin. He spent the entire holding on the watch. How will Carsten report this on his tax return?

No reporting is necessary until he sells the watch. At that time, he will report a gain or loss, depending on the sale price of the watch.

As a short-term capital gain of $1,000 on Form 8949. His basis in the watch is $2,500.

As $2,500 in ordinary income.

No reporting is necessary when purchases are made using virtual currency.

Question 19 of 75.

Given the information provided, choose the response that best describes a taxpayer who can claim a deduction for transportation expenses.

Esteve, an employee, is reimbursed by his employer for his public transit pass. Meshawn, a salaried manager for a box store, uses his Ford F-150 to deliver purchased goods to customers if they don't have a vehicle large enough.

John, a self-employed taxpayer, usually drives his Chevy Suburban when he travels between clients to visit with them at their place of business. Occasionally, he trades cars with his wife and uses her Chevy Sonic. Juan, a self-employed attorney, leased a new Camaro this year. He uses it for travel between his home and the office where he conducts all of his business.

Question 20 of 75.

Mechello is a self-employed consultant in Springfield, MO. She traveled to San Diego in February to attend a week-long conference. After the conference ended, she stayed for two extra days to relax and do some sightseeing. She had the following expenses: $600 airfare, $1,800 hotel (9 nights), $900 In meals, and $100 in taxi charges. What is her total allowable deductible expense for the trip? $

2,500 $

2,800 $

3,000 $

3,400

Question 28 of 75.

If a servicemember receives reimbursement for moving expenses, how much will the amount be reported to them?

Using Form DD 214.

On a separate Form W-2 with code P in box 12.

The amount is not reported as it is not taxable income.

Using Form DD 2058.

Question 36 of 75.

Which of the following statements is TRUE regarding the effect of a health savings account (HSA) on tax outcomes?

Pre-tax contributions reduce the tax liability. Employer contributions do not affect annual contribution limits.

After-tax contributions are not deductible. Distributions are always taxable income.

Question 45 of 75.

Noela (24) has a health savings account (HSA). In 2021, she made contributions of $4,250 to the HSA. Where on the return will she calculate the additional tax?

Form 5329.

Form 1099-SA.

Form 8863.

Form 5498-SA.

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