Registered Tax Return Preparer Test

Question 1

A taxpayer paid $15,827 in mortgage interest on a house that belonged to someone else and in which the taxpayer had no ownership stake. What percentage of interest may the taxpayer deduct?

Accepted Answer

$0

Answer

$1

Answer

$18,833

Answer

$1000

Question 2

The taxpayer paid $2,000 in loan interest on a recreational van with sleeping, cooking, and bathroom amenities in addition to $5,000 in mortgage interest on a principal property, $1,500 on a vacation home, and $1,500 on a vacation home. What is the maximum mortgage interest deduction for taxpayers?

Accepted Answer

$7000

Answer

$8000

Answer

$6000

Answer

$5000

Question 3

A tax payer wins $10,000 at a casino. $500 is deducted by the casino for federal income taxes. What should the taxpayer do in terms of taxes?

Accepted Answer

The tax payer is required to disclose gains and may deduct any applicable Federal tax withheld on Form 1040 for income

Answer

The taxpayer did not report the wins, hence the taxpayer is not required to do so the casino issues you a Form 1099G

Answer

The wins do not have to be reported by the taxpayer on Form 1040. Unless the taxpayer chooses to make a claim for the withheld on the Form 1040

Answer

The taxpayer's Form 1040 must include a wins report, although the amount of federal income tax withheld cannot be claimed by the taxpayer unless the taxpayer claims certain deductions

Question 4

An unmarried taxpayer gives an aging parent all the assistance required for them to live independently in a separate residence. The parent is being listed as a dependent by the taxpayer. Which of the following filing statuses is permitted for the taxpayer to use when filing and is typically best for the taxpayer to use?

Accepted Answer

Head of the family

Answer

Eligible widow

Answer

Filing separately after marriage

Answer

Single

Question 5

Which of the following is subject to self-employment tax?

Accepted Answer

Independent contractors declaring $400 or more in net self-employment income

Answer

Companies reporting gross revenues of less than $50,000

Answer

Independent contractors declaring S 100 of self-employment income

Answer

those who simply disclose their dividend and interest income

Question 6

In the event that a taxpayer's total itemized deductions are greater than...

Accepted Answer

A higher standard deduction than that of the taxpayer

Answer

Equal to the self-employment tax of the taxpayer

Answer

Twice the unemployment benefits paid to taxpayers

Answer

Than the taxpayer's interest income, but less

Question 7

In general, which of the following payments is taxable?

Accepted Answer

Unemployment benefits

Answer

VA advantages

Answer

Based on need, payments from a government support fund

Answer

Approved payments for disaster relief