B. Acy Bachelor of Accountancy Tax Accounting (REG) 3

Question 1

Which of the following is a 'above-the-line' deduction (adjustment to gross income)?

Accepted Answer

Student loan interest

Answer

Student loan interest is an above-the-line deduction on Schedule 1, reducing adjusted gross income without itemizing.

Question 2

Under the passive activity loss rules, which taxpayer can deduct up to $25,000 in rental real estate losses against non-passive income?

Accepted Answer

Active participants with AGI up to $100,000

Answer

The $25,000 allowance phases out for taxpayers with MAGI between $100,000 and $150,000 who actively participate.

Question 3

A partnership's ordinary business income is reported to partners on which tax form?

Accepted Answer

Schedule K-1 (Form 1065)

Answer

Partnerships issue Schedule K-1 (Form 1065) to report each partner's share of income, deductions, and credits.

Question 4

The 'wash sale' rule disallows a loss when substantially identical securities are purchased within how many days before or after the sale?

Accepted Answer

30 days

Answer

The wash sale rule disallows losses when substantially identical securities are bought within 30 days before or after the sale.

Question 5

Which of the following is NOT subject to self-employment tax?

Accepted Answer

Dividends from corporate stock

Answer

Dividends from corporate stock are investment income and are not subject to self-employment tax.

B. Acy Bachelor of Accountancy Practice Test