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Chapters 7-11 Review (ITC 2023) Questions and Answers
Chapters 7-11 Review (ITC 2023) Questions and Answers
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Chapters 7-11 Review (ITC 2023)Duke and his wife were legally divorced in 2021. After the divorce, Duke retained physical custody of their son. Duke received the following amounts from his ex-wife, on behalf of their son or as ordered by the court through a divorce decree: • Court-ordered child support of $2,000 per month. • Court-ordered alimony of $1,000 per month.
How much of this income should be reported on Duke's federal return?
a) $0
b) $12,000
c) $24,000
d) $36,000 - Answer- a) $0
Which of the following individuals is an eligible educator and may deduct up to $300 of qualified educator expenses? (None of them received any reimbursements.)
a) Mr. Francis is a teacher's aide at the local high school. He taught part-time. He worked 600 hours during the year and spent $400 on teaching supplies used in his classroom.
b) Mr. Chang is a fourth-grade teacher. He taught full-time in a classroom and worked more than 900 hours during the school year. He spent $750 on teaching suppl - Answer- b) Mr. Chang is a fourth-grade teacher. He taught full-time in a classroom and worked more than 900 hours during the school year. He spent $750 on teaching supplies used in his classroom.
Which of the following is an example of taxable alimony? a) A cash or check payment made under a decree of divorce or separation. The marriage settlement agreement was signed before December 31, 2018. b) Child support payments. c) A property transfer made within one year of a divorce. d) Voluntary payments made outside of an agreement or a court decree of divorce or separation. - Answer- a) A cash or check payment made under a decree of divorce or separation. The marriage settlement agreement was signed before December 31, 2018. Karen and Pete are married and will file a joint return. They brought all their tax documents to Jamal to prepare their return. The three documents are a Form W-2 for Karen ($55,300), a Form W-2 for Pete ($22,400), and unemployment compensation for Pete of $5,200. What will be their total income reported on their 2022 Form 1040, line 9? a) $27,600 b) $55,300 c) $77,700 d) $82,900 - Answer- d) $82,900
Brian and Joy are divorced. Their divorce settlement agreement signed on June 1, 2017, states Brian must pay Joy $1,000 per month for child support and $1,000 per month for alimony.
Joy's child support payments are:
a) Considered alimony.
b) Fully taxable.
c) Nontaxable.
d) Partially taxable. - Answer- c) Nontaxable.
Devan and Amber adopted a child with special needs in a domestic adoption. They had $5,500 in qualified adoption expenses in 2022, and the adoption was finalized on December 18, 2022. Their modified adjusted gross income is $210,000. Assuming all requirements are met, what is the maximum adoption credit they can claim in 2022?
a) $5,500
b) $14,300
c) $14,890
d) $20,390 - Answer- c) $14,890
If a taxpayer files their return claiming an education credit for the full amount of a student's qualified education expenses and later receives a refund from the institution, what advice will you give to the taxpayer?
a) All credits will be reduced in future years.
b) Any future education credits will be disallowed.
c) There is no tax consequence.
d) They will have to recapture (pay back) some of the credit claimed. - Answer- d) They will have to recapture (pay back) some of the credit claimed.
Taxpayers who acquire qualifying commercial vehicles, weighing under 14,000 pounds, after December 31, 2022, through December 31, 2032 may qualify for the Credit for Qualified Commercial Clean Vehicles on the 2023 tax return. What is the maximum credit per vehicle? a) $3,750
b) $4,000
c) $5,000
d) $7,500 - Answer- d) $7,500
Ellen and her husband were legally divorced in 2017. After divorce, Ellen retained physical custody of their children. Ellen received the following amounts from her ex-
husband, on behalf of the children or as ordered by the court through a divorce decree:
• Court-ordered child support of $1,000 per month.
• Court-ordered alimony of $500 per month.
How much of this income should be reported on HELLEN federal return?
a) $0
b) $6,000
c) $12,000
d) $18,000 - Answer- b) $6,000
Monica cashed in a CD (certificate of deposit) early because she needed money quickly
to pay credit card bills. The bank charged her an early withdrawal penalty of 3#, which amounted to $90. Can Monica deduct the penalty on her tax return? If so, where on the return is it reported?
a) No; Monica will not be allowed to deduct the early withdrawal penalty.
b) Yes; Monica can deduct the early withdrawal penalty but only if she uses Schedule A (Form 1040) and itemizes.
c) Yes; Monica can deduct $90 - Answer- c) Yes; Monica can deduct $90 on Part II, line
18 of Schedule 1 (Form 1040) as an adjustment to income.
In 2022, Gabby incurred $2,500 in unreimbursed employee business expenses (none of
the expenses are impairment related). Her adjusted gross income was 50,000, and she had no other miscellaneous deductions. What amount is she able to deduct on her 2022
Schedule A (Form1040), Itemized Deductions?
a) $0
b) $1,000
c) $1,500
d) $2,500 - Answer- a) $0 ???
Robert is single. He purchased a new main home in March of 2017 for $900,000. Robert will be itemizing his deductions. On what portion of the acquisition debt will interest be deductible on Robert's tax return for 2022?
a) $375,000
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