Practice Test Geeks(ABA) Accredited Business Accountant Practice Test
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Tax Preparation & Compliance Flashcards

7 cards from real ABA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Tax Preparation & Compliance flashcards as text

  1. Which of the following best describes the 'kiddie tax' rules under IRC §1(g)?

    Answer: Unearned income of children under age 19 (or full-time students under 24) above a threshold is taxed at the parent's marginal rate

    The kiddie tax taxes net unearned income of qualifying children above a threshold at the parent's marginal rate to prevent income-shifting to lower-bracket children.

  2. A taxpayer has a $12,000 net capital loss in 2024. How much can be deducted against ordinary income, and what happens to the remainder?

    Answer: $3,000 deducted; $9,000 carries forward indefinitely

    Individuals may deduct up to $3,000 of net capital losses against ordinary income per year; the remaining $9,000 carries forward to future years.

  3. What is the standard mileage rate for business use of a vehicle for 2024?

    Answer: 67 cents per mile

    For 2024, the IRS standard mileage rate for business use is 67 cents per mile, up from 65.5 cents in 2023.

  4. Under IRC §1231, which of the following assets qualifies as a Section 1231 property?

    Answer: Depreciable real property used in a trade or business held over one year

    Section 1231 property includes depreciable property and real property used in a trade or business and held for more than one year, providing favorable tax treatment.

  5. A calendar-year C corporation must file its Form 1120 by what date (without extension)?

    Answer: April 15 (3.5 months after year-end)

    C corporations filing Form 1120 must file by the 15th day of the 4th month after year-end, which is April 15 for calendar-year corporations.

  6. Which of the following expenditures must be capitalized and amortized over 15 years under IRC §197?

    Answer: Goodwill acquired in a business purchase

    IRC §197 intangibles, including purchased goodwill, must be amortized ratably over 15 years regardless of the asset's actual useful life.

  7. Which filing status generally results in the lowest tax liability for a qualifying single parent with a dependent child?

    Answer: Head of Household

    Head of Household status offers wider tax brackets and a higher standard deduction than Single, resulting in lower tax for qualifying single parents.