Question: Donald is a 21-year-old full-

> 1. What is the relationship between the ethical obligation of honesty and truth telling? 2. Is it ever proper to not tell someone something that he or she has an expectation of knowing? If so, describe under what circumstances this might be the case. How

> A common ethical dilemma used to distinguish between philosophical reasoning methods is the following. Imagine that you are standing on a footbridge spanning some trolley tracks. You see that a runaway trolley is threatening to kill five people. Standing

> Raquel, who works in medical sales, drives her own vehicle to various locations for client sales meetings. Her employer reimburses her $400 each month for various business expenses and does not expect Raquel to provide proof of her expenses. Her employ

> Which expense, incurred and paid in 2017, can be claimed as a miscellaneous itemized deduction subject to the 2% of AGI floor? a. Self-employed health insurance. b. Unreimbursed moving expenses. c. Employee’s unreimbursed business car expense. d. Self-e

> In 2017, the Rinaldis’ vacation cottage was severely damaged by an earthquake. They had AGI of $110,000 in 2017. Following is information related to the cottage: Cost basis………………………………………..$95,000 FMV before casualty…………………………135,000 FMV after casualty

> In 2017, the president of the United States declared a federal disaster due to brush fires in the Southwest. Lisa lives in that area and lost her home in the fires. What choice does she have regarding when she can claim the loss on her tax return? a.

> Which of the following statements is not true regarding documentation requirements for charitable contributions? a. If the total deduction for all noncash contributions for the year is more than $500, Section A of Form 8283, Noncash Charitable Contribut

> Which of the following organizations qualifies for deductible charitable contributions? a. A nonprofit educational institution. b. The Salvation Army. c. Churches. d. All of the above.

> For 2017, Thomas, a single parent, reported the following amounts relating to his investments: Net investment income………………..……………………………………………………………..$7,000 Interest expense on a loan to purchase stocks…………………………………………….…..2,000 Interest expense on funds

> For 2017, the deduction by a taxpayer for investment interest expense is: a. Not limited. b. Limited to the taxpayer’s net investment income for 2017. c. Limited to the investment interest paid in 2017. d. Limited to the taxpayer’s gross investment inc

> What is the maximum amount of personal residence acquisition debt on which interest is fully deductible on Schedule A? a. $1,000,000. b. $500,000. c. $250,000. d. $0.

> During 201 Noriko paid the following taxes related to her home: Real Estate property taxes on residence (paid from escrow account)……………..$1,800 State personal property tax on her automobile (based on value)…………………………600 Property taxes on land held for l

> Daryl, who had significant itemized deductions for 2017 and therefore was eligible to use Schedule A, purchased a new vehicle in 2017 for $40,000 with a state sales tax of 10%. The allocated deduction amount for other purchases made by Daryl throughout t

> For 2017, the amount of the sales tax deduction is calculated by: a. Determining the actual sales tax paid during the year. b. Using the IRS sales tax deduction calculator. c. Using the sales worksheet and tax tables provided by the IRS in the Schedule

> For 2017, Perla, who is single and 55 years of age, had AGI of $60,000. During the year, she incurred and paid the following medical costs: Doctor and dentist fees…………………………………………..$3,350 Prescription medicines………………………………………………..625 Medical care insura

> Prescription drugs obtained from sources outside the United States, such as Canada, are: a. Always deductible no matter how they were obtained. b. Deductible only for citizens of Canada living in the United States. c. Deductible if prescribed by a physi

> During 2017, Raul incurred and paid the following expenses: Prescription drugs…………………………………………………………$ 470 Vitamins and over-the-counter cold remedies…………………..130 Doctors and dentist visits…………………………………………………700 Health club fee………………………………………………………………...

> The threshold amount for the deductibility of allowable medical expenses is: a. 7.5% of AGI. b. 10% of AGI. c. 10% of taxable income. d. 15% of taxable income.

> Generally, a taxpayer may deduct the cost of medical expenses for which of the following? a. Marriage counseling. b. Health club dues. c. Doctor-prescribed birth control pills. d. Trips for general health improvement.

> The majority of itemized deductions are: a. Business expenses. b. Tax credits. c. Personal living expenses. d. None of the above.

> The amount of savings bond interest exempt from tax is limited when an individual is single and his or her AGI reaches a. $117,250. b. $77,550. c. $78,150. d. $76,000.

> An individual with an OID instrument must annually report a portion of the OID as a. Dividend income. b. Pension income. c. Capital gain income. d. Interest income.

> Original issue discount (OID) is deemed to be zero if it is less than ________ of the maturity value, multiplied by the number of complete years to maturity. a. 0.25%. b. 5%. c. 25%. d. 15%.

> Determine the amount of tax liability in the following situations. In all cases, the taxpayer is using the filing status of married filing jointly. a. Taxable income of $62,449 that includes a qualified dividend of $56. b. Taxable income of $12,932 tha

> Daniel and Alexis, both 28, are interested in saving for the college education of their twin daughters Alie and Amber. They decide to purchase some Series EE U.S. savings bonds because they know that the interest on the bonds is tax-free in certain circ

> In 2017, Joseph and Patricia Jefferson redeemed $8,000 of Series EE U.S. savings bonds (principal of $5,500 and interest of $2,500), the proceeds from which were used to pay for qualified higher education expenses of their dependent daughter who is atten

> Define original issue discount (OID). Under what circumstances are the OID rules applied?

> Briefly explain the application of the imputed interest rules.

> Define imputed interest.

> Explain the rules governing the exemption of interest on U.S. savings bonds from taxation if it is used for educational purposes.

> A person is selling some property and wishes to obtain payment partially in cash with the remainder in the form of a carryback note receivable. a. Why might the seller wish to increase the sales price and reduce the interest rate on the carryback note?

> Mimi is 22 years old and is a full-time student at Ocean County Community College. She lives with her parents, who provide all of her support. During the summer, she put her Web design skills to work and earned $4,150. Can Mimi’s parents claim her as

> What is a multiple support agreement, and what is its purpose?

> What qualifications are necessary to file as head of household?

> What is a for AGI deduction? Give three examples.

> Prepare a table of the possible IRS penalties listed in the text and give a brief summary of the purpose of each penalty.

> Paul has the following information: AGI for 2017 = $155,000 Withholding for 2017 = $ 24,000 Total tax for 2016= $ 29,000 Total tax for 2017= $ 33,470 a. How much must Paul pay in estimated taxes to avoid a penalty? b. If Paul paid $1,000 per quarter, wo

> Victoria’s 2017 tax return was due on April 15, 2018, but she did not file it until June 12, 2018. Victoria did not file an extension. The tax due on the tax return when filed was $8,500. In 2017, Victoria paid in $12,000 through withholding. Her 2016

> Using the appropriate tax tables or tax rate schedules, determine the tax liability for tax year 2017 in each of the following instances. In each case, assume the taxpayer can take only the standard deduction. A single taxpayer with AGI of $23,493 and

> Determine the average tax rate and the marginal tax rate for each instance in question 40. Data from question 40: Using the appropriate tax tables or tax rate schedules, determine the amount of tax liability in each of the following instances. A marri

> Using the appropriate tax tables or tax rate schedules, determine the amount of tax liability in each of the following instances. a. A married couple filing jointly with taxable income of $32,991. b. A married couple filing jointly with taxable income o

> Determine the amount of the standard deduction for each of the following taxpayers for tax year 2017: Christina, who is single. Adrian and Carol, who are filing a joint return. Their son is blind. Peter and Elizabeth, who are married and file separate

> Raphael and Martina are engaged and are planning to travel to Las Vegas during the 2017 Christmas season and get married around the end of the year. In 2017, Raphael expects to earn $45,000 and Martina expects to earn $15,000. Their employers have dedu

> Shandra is a U.S. citizen and is the 68-year-old widowed mother of Janet. After retirement, Shandra decided to fulfill a lifelong dream and move to Paris. Shandra receives $1,000 of interest income, but all of her other living expenses (including rent on

> Roberta is widowed and lives in an apartment complex. She receives $8,000 of social security income that she uses to pay for rent and other household expenses. The remainder of her living expenses is paid by relatives and neighbors. The total amount o

> In which of the following cases may the taxpayer claim head of household filing status? a. The taxpayer is single and maintains a household that is the principal place of abode of her infant son. b. The taxpayer is single, maintains a household for hers

> List the five types of filing status and briefly explain the requirements for the use of each one.

> The benefits of many deductions, credits, or other benefits are limited to taxpayers with Adjusted Gross Income below certain limits. Explain how the limitation (phaseout) process works. Give two examples of deductions, credits, or other benefits that

> Charles and Joan Thompson file a joint return. In 2016, they had taxable income of $92,370 and paid tax of $14,636. Charles is an advertising executive and Joan is a college professor. During the fall 2017 semester, Joan is planning to take a leave of ab

> How many personal exemptions can a taxpayer claim on his or her tax return? Explain your answer.

> What is a Treasury Regulation? What are the four types of regulations and how do they differ?

> When would a taxpayer want to sue the government in a district court versus the Tax Court?

> What are the advantages in petitioning the Tax Court versus other trial courts?

> Where are Revenue Rulings and Revenue Procedures found? When might a Revenue Ruling be useful to a taxpayer? When might a Revenue Procedure be useful to a taxpayer?

> Differentiate between a General Regulation and a Legislative Regulation. Which one is the stronger tax authority?

> What is meant by a Proposed Regulation? Can a taxpayer rely on a Proposed Regulation as authority on how to treat a certain tax item?

> What is the purpose of the Joint Conference Committee? Its reports are considered more important or are more authoritative. Why?

> What are committee reports, and how can they help the taxpayer or tax preparer?

> Discuss the concept of statutory tax authority. Why is there a need for additional types of authority when statutory authority is the law?

> What is the difference between a Revenue Ruling and a Revenue Procedure? How does the level of authority of a ruling or procedure compare with regulations and statutory authority?

> Why might a district court’s opinion regarding a tax decision be more likely to be reversed on appeal?

> After the Court of Appeals, does the taxpayer have any additional avenue for appeals? If so, what are the taxpayer’s probabilities of receiving an appeal after the Court of Appeals? Why?

> If a taxpayer loses a case against the IRS in one of the three trial courts, does the taxpayer have any avenue for appeals?

> In what courts are disputes between the IRS and a taxpayer heard?

> Can a taxpayer rely on a Temporary Regulation as authority on how to treat a certain tax item? If so, how long is a Temporary Regulation valid?

> What is administrative authority, and who publishes it?

> Explain what is meant by Public Law 100-14.

> During the year 2017, Ricki, who is not self-employed and does not receive employer reimbursement for business expenses, drove her car 5,000 miles to visit clients, 10,000 miles to get to her office, and 500 miles to attend business-related seminars. All

> Reynaldo and Sonya, a married couple, had flood damage in their home due to a faulty water heater during 2017, which totally ruined the furniture that was stored in their garage. The following items were completely destroyed and not salvageable. Damaged

> What is the legislative process concerning tax laws? Where does tax legislation often begin?

> In 2017, Arturo’s pleasure boat that he purchased in 2012 for $48,500 was destroyed by a hurricane. His loss was not totally covered by his insurance. On what form(s) will Arturo report this loss?

> Jinhee purchased a ticket to a concert to raise money for the local university. The ticket cost $350, but the normal cost of a ticket to this concert is $100. How much is deductible as a charitable contribution?

> Shelby has net investment income of $18,450 and wage income of $80,500. She paid investment interest expense of $19,000. What is Shelby’s deduction for investment interest expense? Explain your answer.

> In 2016, Tomas, a single taxpayer, had $ $3750 in state tax withheld from his paycheck. He properly deducted that amount on his 2016 tax return as an itemized deduction that he qualified for, thus reducing his tax liability. After filing his 2016 tax r

> On April 1, 2017, Paul sold a house to Amy. The property tax on the house, which is based on a calendar year, was due September 1, 2017. Amy paid the full amount of property tax of $2,500. Calculate both Paul’s and Amy’s allowable deductions for the p

> Leslie and Jason, who are married, paid the following expenses during 2017: Interest on a car loan………………………………………………………. $ 100 Interest on lending institution loan (used to purchase municipal bonds) …………………………………

> Mickey is a 12-year-old dialysis patient. Three times a week for the entire year he and his mother, Sue, drive 20 miles one way to Mickey’s dialysis clinic. On the way home, they go 10 miles out of their way to stop at Mickey’s favorite restaurant. Th

> Explain the requirements necessary for a scholarship to be tax-free to the recipient.

> What is an employer-provided fringe benefit?

> When determining the taxability of social security benefits, the IRC uses the concept of provisional income. How is provisional income calculated?

> What are the three types of tax authority? Who issues each type?

> How do dividends and earnings and profits relate to each other?

> Sam owns all of the stock in a newly formed corporation. During 2017, the first year of operation, the corporation realized current earnings and profits of $10,000. Sam received a $12,000 distribution from the corporation. How much, if any, of the distri

> What is a dividend?

> Your friend John files his own tax returns. He received a computer as a dividend from a closely held corporation. He says that he does not need to report the computer as dividend income because the dividend was not paid in cash. Is he right? Why?

> Explain how income is recognized under the cash method of accounting.

> A single taxpayer is 26 years old and has wages of $18,000 and interest income of $450. Which is the simplest tax form this person can file? 1040. 1040EZ. 1040A. d. 1040Z.

> When there is fraud on a return, the IRS charges a penalty of ________ on any portion of understatement of tax that is attributable to the fraud. 20%. 25%. 75%. d. 100%.

> When there is negligence on a return, the IRS charges a penalty of ________of the tax due. 25%. 20%. 18%. d. 10%.

> What is the percentage of interest the IRS was charging on assessment (amount of unpaid tax liability) during March 2017? You might want to do this research by going to the IRS Web site (www.irs.gov). 6%. 5%. 3%. d. 4%.

> What is the amount of the tax liability for a married couple filing jointly with taxable income of $135,500? $33,875. $28,333. $20,325. d. $25,353.

> Discuss the concept of “tax authority.” How does tax authority help taxpayers and tax preparers report tax items properly?

> Employers are required to withhold social security taxes from wages paid to employees. What is the amount of the social security wage limitation for 2017? $127,200. $118,500. $113,700. d. $106,800.

> A married couple, both of whom are under 65 years old, decided to file as married filing separately. One of the spouses is going to itemize deductions instead of taking the standard deduction. What is the standard deduction permitted to the other spous

> Which amount represents the standard deduction for a taxpayer who is 44 years old and claiming head of household status? $9,250. $9,300. $9,350. d. $6,350.

> To be a qualifying relative, who has to live in the home of the taxpayer for the entire year? Cousin. Child. Stepchild. d. Father.

> To be a qualifying child, the taxpayer must meet three general tests and five specific tests. Which of the following is not part of the five specific tests? Support test. Age test. Gross income test. d. Relationship test.

> What is the amount of the personal and dependency exemptions for 2017? $3,950. $4,100. $4,000. d. $4,050.

> Esmeralda is 20 years of age and a full-time student living with her parents. She had wages of $500 ($50 of income tax withholding) for 2017. Can Esmeralda claim her own exemption on her return even though her parents will claim her as a dependent? Ye

> A taxpayer’s spouse died on December 31, 2016. He has no qualifying child. Which status should the taxpayer select when filing his 2017 tax return? Qualifying widow(er). Married filing jointly. Single. d. Married filing separately.