H & R Block Final
Paloma purchased a home with her husband, Neville, in January of 2021 for $700,000. In June of 2021, Paloma and Neville separated. On December 31, 2022, they were still legally married but did not live together all year. They do not live in a community property state. Neville refused to file a joint return with Paloma. Paloma filed her return using the married filing separately filing status. Paloma is living in the home and has continued to make the mortgage payments using funds from her own account. Paloma will be itemizing her deductions. On what portion of the acquisition debt will interest be deductible on Paloma's tax return for 2022?
$375,000
Kailani has a bank account at Lending Bank. She received Form 1099-INT, Interest Income, shown below. She has no other interest or dividends to report. Where should this income be reported on Kailani's tax return? Answer choices are below the image.
$410 on line 2a, $230 on line 2b of Form 1040, and $45 on line 18 of Schedule 1 (Form 1040).
Rhianna purchased a home for $650,000. She added a swimming pool at a cost of $25,000 and a patio deck for $8,000. What is Rhianna's adjusted basis for this property?
$683,000
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?
$7,500
Soledad is single. He borrowed $900,000 and purchased a new main home in March of 2020. Soledad will be itemizing his deductions. On what portion of the acquisition debt will interest be deductible on Soledad's tax return for 2022?
$750,000
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?
$82,900
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?
$900,000
Ellen and her husband were legally divorced in 2017. After the 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 Ellen's federal return?
6,000
On October 1, 2021, Sara purchased 80 shares of JEP stock for $2,000. On September 30, 2022, she sold the 80 shares for $1,500. What is Sara's gain or loss?
A short-term loss of $500.
Which of the following statements is TRUE regarding nontaxable employer-provided tuition reimbursements? Nontaxable employer-provided tuition reimbursements:
Are tax-free and cannot be used to claim any education credit.
Stanley holds foreign investments in foreign stocks and bonds. The issuing foreign country withheld taxes on his investment income. To avoid double taxation on the income earned from these investments, Stanley may be eligible to claim which credit?
Foreign Tax Credit.
On July 15, 2008, Michael and his wife Julie purchased a new home. They received the First-time Homebuyer Credit in the amount of $7,000. What tax form is used to repay their tax credit?
Form 5405.
What is the maximum amount of tax years a student may claim the lifetime learning credit?
Four years.
Which of the following will decrease the original basis of property to determine the adjusted basis?
Legal fees.
Owen received the following Form 1099-B reporting the sale of 100 shares of stock. How should the sale of this property be reported on his tax return?
Long-term capital loss of $1,660.
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.)
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
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:
Nontaxable.
Stevie received significant dividend income during the tax year. How should she report the dividend income if she has ordinary dividend income in excess of $1,500?
On Schedule B and Form 1040, line 3b.
Which of the following is used to calculate the tax due when a taxpayer's only investment income is from capital gain distributions from a mutual fund?
Qualified Dividends and Capital Gain Tax Worksheet
Sales and exchanges of personal-use and investment-use property are generally reported first on Form 8949, Sales and Other Dispositions of Capital Assets. The totals reported on Form 8949 are then carried to which form or schedule?
Schedule D (Form 1040).
Christine wants to sell some property but needs to determine the basis first. Which of the following items increase her original basis?
The cost of capital improvements.
Joshua purchased a qualified plug-in electric motor vehicle on June 2, 2022. He qualifies for the Qualified Plug-in Electric Drive Motor Vehicle Credit. Joshua may qualify for a credit of what amount?
The credit ranges from $2,500 to $7,500, depending on battery capacity and other factors.
Nash was reimbursed in 2022 by his insurance company for a medical expense that he had previously deducted on his 2021 Schedule A (Form 1040), Itemized Deductions. What is the tax treatment of the recovered medical expense, if any?
The recovery is includable in income in the year received up to the amount by which the deduction or credit claimed reduced taxes in the prior year.
The Premium Tax Credit is a credit that helps pay the cost of health care coverage through the Health Insurance Marketplace. All the following are true, EXCEPT:
The tax household includes the taxpayer, spouse, and anyone who is claimed as a dependent on the tax return.
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?
They will have to recapture (pay back) some of the credit claimed.
To claim the Clean Vehicle Credit, the qualifying electric vehicle must have been assembled in North America after which date?
To claim the Clean Vehicle Credit, the qualifying electric vehicle must have been assembled in North America after which date?
What is the federal tax treatment of capital gain distributions reported on Form 1099-DIV, Dividends and Distributions?
Treated as long-term capital gains.
Tuition payments.
Which of the following expenses is allowed for the American Opportunity Tax Credit?
If a taxpayer has to repay an amount they reported as income in an earlier year (because at the time, they thought they had an unrestricted right to it), they may be able to claim a deduction or a credit under the "claim of right" rules.Choose the response that correctly completes the next sentence describing a taxpayer's eligibility for a deduction or credit under these rules. The taxpayer:
ay be able to claim the deduction or credit if the amount they repaid is more than $3,000.
Audrey is a degree candidate at her local state college. She received a scholarship for $5,000. She applied the amount to her tuition, which totaled $10,000. How much, if any, of the scholarship is taxable income?
$0
On the Schedule A (Form 1040), Itemized Deductions, the deduction for state and local income taxes is limited to what amoun
$10,000 ($5,000 if MFS).
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?
$14,890
Harmony donated a car to a qualified charitable organization. She purchased the car in 2013 for $28,000. The fair market value of the car when she donated it was $3,750. The charitable organization immediately sold the car for $2,000. They did not significantly use or make any improvements to it. The organization provided Harmony with a Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes. How much can she deduct as a charitable contribution on her Schedule A (Form 1040), Itemized Deductions?
$2,000
Marcel attends graduate school. For 2022, he received a Form 1098-T, Tuition Statement, showing tuition paid of $14,300. What is the maximum amount of the lifetime learning credit he can claim for 2022?
$2,000
George graduated from college last year and started repaying his student loans. He received Form 1098-E, Student Loan Interest Statement, showing he paid $3,000 in interest on his student loans for the year. His total income before adjustments is $68,500, and he meets all requirements to be able to deduct the interest. How much, if any, will George be allowed to deduct as an adjustment to his income?
$2,500
Jamal purchased his home in 2019. In 2022, he installed energy efficient windows that meet the Energy Star most efficient certification requirements for a total cost of $1,600. He also installed exterior doors that meet the Energy Star requirements for a total cost of $2,100. His tax liability is $3,900. Jamal had a Residential Energy Property Credit in a previous year in the amount of $300. What is the amount of his Energy Efficient Home Improvement Credit?
$200
Jordyn is single. She purchased her first home for $180,000 in 2018. It served as her primary residence until she sold it on November 1, 2022 for $440,000. She paid a $26,400 commission as an expense of sale. During the time she owned her home, she did not use it for business or to produce rental income. What is the amount of her long-term gain that can she exclude from income on her return?
$233,600
Choose the response that accurately completes the following sentence. Written acknowledgment from the donee for contributions to qualified charitable organizations is required when a taxpayer makes a single donation of:
$250 or more.
