IFA Taxation & Compliance 2

Question 1

A sole proprietor uses their home office exclusively for business. Which IRS form is used to calculate the home office deduction?

Accepted Answer

Form 8829

Answer

Form 8829 (Expenses for Business Use of Your Home) is used by sole proprietors to calculate the allowable home office deduction on Schedule C.

Question 2

Under FBAR rules, a US person must file FinCEN Form 114 if the aggregate value of foreign financial accounts exceeds what threshold at any point during the year?

Accepted Answer

$10,000

Answer

US persons must file FBAR (FinCEN 114) when the aggregate value of all foreign financial accounts exceeds $10,000 at any point during the calendar year.

Question 3

Which depreciation method results in the highest depreciation expense in the first year for a 5-year property?

Accepted Answer

200% declining balance

Answer

The 200% declining balance method (double declining balance) applies twice the straight-line rate to the book value, yielding the highest first-year depreciation.

Question 4

A calendar-year C corporation that expects to owe more than $500 in tax must make estimated tax payments. What are the four due dates?

Accepted Answer

April 15, June 15, September 15, December 15

Answer

C corporations must make estimated tax payments by April 15, June 15, September 15, and December 15 for calendar-year taxpayers.

Question 5

Which IRC section governs the treatment of like-kind exchanges, allowing deferral of gain on qualifying real property swaps?

Accepted Answer

Section 1031

Answer

IRC Section 1031 allows taxpayers to defer recognition of gain when they exchange qualifying real property for other like-kind real property.

(IFA) Institute of Financial Accountants Certification Practice Test

(IFA) Institute of Financial Accountants Certification Practice Test

IFA Taxation & Compliance 2