AFTR AFTR Business Tax Basics

Question 1

A sole proprietor reports business income and expenses on which schedule attached to Form 1040?

Accepted Answer

Schedule C

Answer

Schedule A

Answer

Schedule B

Answer

Schedule E

Question 2

Under the cash method of accounting, a business recognizes income when:

Accepted Answer

Payment is constructively or actually received

Answer

An invoice is issued to the customer

Answer

A contract is signed

Answer

Goods are shipped

Question 3

Section 179 expensing allows a business to:

Accepted Answer

Deduct the full cost of qualifying business property in the year it is placed in service

Answer

Amortize startup costs over 15 years

Answer

Exclude gain on the sale of business real estate

Answer

Defer depreciation recapture to a later year

Question 4

What is the primary purpose of Form 1099-NEC?

Accepted Answer

To report nonemployee compensation paid of $600 or more to independent contractors

Answer

To report interest income over $10

Answer

To report distributions from retirement accounts

Answer

To report proceeds from broker transactions

Question 5

Bonus depreciation under current law generally allows businesses to deduct what percentage of the cost of qualifying new or used property in the first year?

Accepted Answer

100%

Answer

50%

Answer

75%

Answer

200%

Question 6

A taxpayer who uses part of their home exclusively and regularly for business may be able to deduct home office expenses using which form?

Accepted Answer

Form 8829

Answer

Form 4562

Answer

Schedule E

Answer

Form 2106