Enrolled Agent Practice Exam

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• What is the maximum age difference to avoid the generation-skipping transfer tax?
• What is the taxable income for an individual who withdraws $2,000 from a health savings account for non-qualifying medical expenses?
• All of the following are eligible for the qualified educator expense deduction except?
• What is the resulting tax refund or liability for a married couple with a $100,000 AGI after applying the Child Tax Credit?
• What is the minimum amount of tips that must be reported to an employer in a month?
• If a self-employed individual sells a personal boat for a loss, how is that loss treated for tax purposes?
• Which of the following is true regarding the responsibility for gift tax?
• An employer who has household employees is required to withhold which of the following?
• What is the earliest date an individual can sell 1,000 shares of stock and still qualify for dividends after purchasing on June 1st?
• Which of the following scenarios does not use cost of acquisition to determine the basis of an asset?
• For the purpose of qualifying for the Child Tax Credit, which aspect is essential?
• What is the minimum number of forms of identification required when filing a tax return?
• What is the minimum number of credits required for the general business credit to facilitate the need for the filing of Form 3800?
• If a couple files taxes separately and one spouse has medical deductions, how is the other spouse's deduction treated?
• In the case of a foreclosed non-recourse loan, what impact does forgiveness of the loan balance have on taxable income?
• What is the maximum Lifetime Learning Credit for a married couple filing jointly with two eligible students?
• All of the following scenarios are exempt from the additional Health Savings Account (HSA) penalty except?
• What is the consequence for not filing Form 8938 after an IRS notice of failure to disclose?
• What is the latest acceptable post-marked date for issuing a refund if a taxpayer discovers an error on a previous return filed on March 2, 2020?
• For an employee making $70,000, what is the maximum amount that can be contributed per paycheck to a 401k with a $19,500 annual limit?
• Which test is used as a basis of qualification for the Child Tax Credit and not for the Earned Income Tax Credit?
• If an individual has overpaid their Social Security tax, what is the proper action to take?
• What is the penalty for failing to withdraw any required minimum distributions from a traditional IRA?
• What is the maximum amount that may be in a health care flexible spending arrangement account before it is subject to income taxes?
• What is a requirement for a taxpayer to claim a child’s interest and dividends on their own tax return?
• How is the cost of points on a refinance loan deducted?
• What form is used for individuals whose insurance comes from a source other than the Marketplace and works for a smaller sized company?
• What is the base amount for computing taxable Social Security benefits for an individual who is single and has a gross income of $25,000?
• What happens to the estate exclusion when gifts are made above the annual exclusion amount?
• Which individual scenario is not eligible for the foreign earned income exclusion?
• For a 63-year-old taxpayer, what is the penalty on early withdrawal from an HSA for non-medical expenses?
• When is the minimum required distribution penalty applicable?
• What is the standard deduction amount for a nonresident alien with a single filing status?
• What is the basis for calculating casualty loss deductions for a non-disaster home loss?
• All of the following are eligible for the Qualified Business Income Deduction except?
• What is the amount of the standard deduction for a full-time college student with a part-time job making $6,600, who is claimed as a dependent?
• Which of the following is NOT true regarding the qualification of real estate as professionals?
• What type of income is generated from the sale of a rare collectible by an individual?
• Which of the following is not considered personal property?
• What is the maximum household income that can qualify for the Premium Tax Credit for a married couple with two children using a Federal poverty line of $26,200?
• Which of the following amounts signifies the taxable income retained by a beneficiary from an inherited asset?
• What portion of a $10,000 scholarship is considered taxable income if $7,500 is used for tuition, $2,000 for room and board, and $500 for books?
• What is the total deduction that can be claimed for rental property repairs and improvements?
• What is the effect of using home equity loan funds for personal expenses on interest deduction?
• What is the eligible saver's credit for a single individual with an AGI of $15,000 who contributed $400 to a traditional IRA?
• Which retirement savings account withdrawal is not subject to a 10% penalty before the age of 59½?
• What is the taxable estate for a woman who gives $1 million gifts yearly for five years and has a gross estate of $10 million?
• What is the total amount of taxable income in the transfer of assets between spouses who are U.S. citizens?
• What is the minimum threshold of tax liability that requires individuals to make estimated tax payments?
• Under which condition can a repayment of $3,000 or more be deducted in the year of the repayment?
• In the event of a home lost to a federal disaster, how is the personal casualty loss deduction computed?
• An individual with a capital gain loss of $7,000 can deduct how much in the current year when filing jointly?
• An individual who pays college tuition directly on behalf of a decedent is not subject to which tax?
• How is the basis of inherited property determined?
• What portion of a Series EE bond purchase is considered taxable?
• Which of the following is not a requirement for head of household status?
• What depreciation method is typically applied to residential rental property improvements?
• What is considered taxable interest when someone receives a welcome bonus from a new credit card?
• What type of expense can charity volunteers claim for tax deductions?
• What is the final required payment date for estimated tax payments for the following year?
• A single taxpayer must file for which tax category if they report income above $200,000?
• What is the maximum contribution limit to an IRA for a married couple where one spouse does not have an income?
• For mutual fund taxable capital gain distributions to be long-term, what minimum holding period is required?
• What is the minimum requirement for filing Form 114, Report of Foreign and Financial Accounts (FBAR)?
• Which scenario should be reported as income for an employee?
• When does the holding period for an employee stock purchase plan (ESPP) begin?
• Which of the following forms is filed not with the IRS, but with the Financial Crimes Enforcement Network (FinCEN)?
• What is the eligible Lifetime Learning Credit amount based on the provided education expenses?
• How often can contributions to a 401k be made by employees?
• What is the maximum credit amount available for a couple adopting a special needs child?
• What amount will be reported on Schedule K-1 for a partner in a partnership with total earnings of $100,000 shared equally among five partners?
• Which of the following can be classified as a noncapital asset?
• What is the threshold for Additional Medicare Tax for married couples filing jointly?
• Which of the following is a non-refundable tax credit?
• Which type of student loan is eligible for interest deduction?
• What tax document must be filed to claim the Adoption Credit?
• Individuals are required to make estimated tax payments if they expect to owe taxes over which amount?
• What is the net gain from selling a home purchased for $230,000 with improvements and flood damage deductions included?
• Which form is used to report capital gains and losses from the sale of assets?
• Under which circumstance is the American Opportunity Tax Credit (AOTC) not refundable?
• Which situation would disqualify a dependent from being claimed?
• In which of the following years may eligible personal casualty and theft losses for a presidentially declared emergency be claimed?
• What is the basis of a house purchased for $200,000 with a tax assessment of $170,000 for the house and $20,000 for the land?
• A couple gives gifts amounting to $36,000. What is the amount of the reduction in the lifetime exemption from the gifts?
• Which of the following defines the taxable estate after making eligible deductions?
• What is the threshold for filing Form 8938 for married filing jointly taxpayers regarding financial assets?
• Which of the following expenses qualifies for the Lifetime Learning Credit?
• Which of the following best describes how charitable deductions are handled for different types of organizations?
• In 2021, the maximum contribution for Social Security tax is determined at what percentage?
• What item is eligible for a prior year Alternative Minimum Tax Credit?
• Which credit is excluded from the General Business Credit?
• What is true about the Earned Income Tax Credit requirements regarding relationship to the taxpayer?
• How much of $10,000 in unreimbursed medical bills can be covered by IRA distributions for an individual with an AGI of $70,000 and age of 50?
• Which scenario requires rental income to be reported in the following tax year?
• What is the eligible Retirement Savings Contributions Credit for a couple married filing jointly with an income of $46,000 and qualifying retirement contributions?
• How many installments are estimated tax payments divided into?
• What does the gift tax generally apply to?
• In a sale involving losses, which asset's loss is deductible for a self-employed individual?
• If a taxpayer's income increases to 420% of the Federal poverty line, what must they do regarding the Premium Tax Credit?
• Which of the following types of income is not subject to the Net Investment Income Tax?
• What is the qualified deductible real estate tax for a seller who paid $4,500 in taxes and sold the home on day 225 of the year?
• What is the age range for a taxpayer to qualify for the Health Coverage Tax Credit?
• What is the maximum deduction for student loan interest paid for the year?
• In which situation can a same-sex couple file as married filing jointly?
• Which type of IRA does not require the calculation of a basis?
• For tax purposes, what is considered a nonrefundable credit?
• In which scenario can an IRA not be rolled over to another account?
• At the end of the year, what is the reported value of an account converted from euros back to U.S. dollars?
• Which of the following is NOT a qualifying charitable organization?
• If an individual is found to have committed intentional fraud related to the Earned Income Tax Credit, what is the penalty?
• When refinancing, how is the cost of points deducted compared to a purchase loan?
• Regarding dependency claims, which statement is true for a single mother living with her child’s grandparents?
• What must be the total aggregate value of foreign accounts to require FBAR filing?
• What is the effect of portability on estate tax exclusion?
• Which of the following rental situations is subject to taxable rental income?
• What is the total amount of medically related deductions for a disabled person who incurs expenses of $1,500 for a ramp and $3,000 in unreimbursed medical expenses?
• Which of the following constitutes self-employment income?
• What condition provides an additional standard deduction regardless of filing status?
• Which of the following gift types are allowed to be spread out over a five-year period for gift tax purposes?
• Which type of income is not eligible for the Child and Dependent Care Credit?
• What is the maximum amount per beneficiary from a qualified 529 plan that can be used for K-12 tuition?
• In the case of transfers between spouses, what tax is typically not applied?
• Which statement is true regarding the Child Tax Credit phase-out?
• If a preferred stock is held for 75 days, what status does the dividend have for tax purposes?
• Which of the following is not an exception to the First-time Homebuyer Credit Repayment requirement?
• Losses from a Ponzi-type investment scheme are treated like which type of loss?
• Which statement is false regarding Individual Taxpayer Identification Numbers (ITIN)?
• Which of the following is NOT classified as a foreign financial account when held outside of the United States?
• Which investment income type cannot qualify for the special income tax rate?
• Which type of interest is not considered qualified interest payments for deductions?
• What is the maximum allowable deduction for real estate taxes on a primary residence?
• Which of the following is NOT a qualifier for determining fair market value?
• How much of a yearly utility bill can be deducted as rental expense for a room rented out in a house?
• What is the maximum length of time for a charitable contribution to be carried over to a subsequent year?
• Which form does an estate need to file in the event of income being received after the beneficiary's death?
• Which type of account is specifically excluded from contributions under a health care flexible spending arrangement?
• What is the minimum gross income for a domestic estate that requires filing Form 1041?
• Which contributions must have a receipt for documentation?
• What is the source of exemption from gift tax among the following?
• Which dividends are subject to the same tax rate that applies to net capital gain?
• Which situation does not exempt an individual from the underpayment penalty?
• If a non-recourse loan is foreclosed and the remaining balance is forgiven, how much of that loan is taxable income?
• What is the gain or loss from the sale of a home priced at $320,000 with $16,000 in commissions and $2,000 in selling expenses?
• What is the minimum amount of taxable interest for which Schedule B is required?
• What amount of education bond interest must be included in taxable income when only part is used for education costs?
• What is the applicable miscellaneous deduction for an individual who has to repay $6,000 in incorrectly reported commissions?
• What type of expense is classified as an improvement for tax purposes?
• What is the total taxable estate if a wife inherits a $12 million estate and later has a gross estate of $24.9 million, considering proper elections are made?
• Which of the following is not a minimum requirement of biographical information for filing a tax return?
• At what modified adjusted gross income level does the initial phase-out for the Child Tax Credit begin for single taxpayers?
• Which of the following best describes the way a mortgage interest deduction can be claimed?
• Which of the following is NOT a requirement for a property to qualify for a section 1031 like-kind exchange?
• Which individual scenario is not eligible for the Earned Income Credit?
• Which form must be timely filed to complete the portability election for the deceased spousal unused exclusion?
• If a check for rental income is delivered in December but returned for insufficient funds, when must the income be reported?
• What would be the adjusted gross income of an individual earning $60,000 with $500 monthly child support payments?
• Which of the following closing costs is NOT included in the basis for the purchase of real property?
• Which type of assistance is NOT eligible for the Health Coverage Tax Credit?
• What is the due date for the filing of Form 1041 for an estate with a fiscal year ending on June 15th?
• Which condition makes a child ineligible for a parent to report their interest and dividends on the parent's tax return?
• What is the tax treatment of a sale when a musician transfers all rights of a song to another individual?
• Which individual is eligible for the Other Dependent Credit?
• For a couple married filing jointly, what is the minimum amount of additional income that would make their social security benefits taxable?
• What is the maximum allowable capital loss deduction against ordinary income per year?
• What factor determines the carryover available for future years from Alternative Minimum Tax credits?
• What is the minimum number of hours an educator must work to qualify for the teacher credit?
• What form should be used for reporting royalty income received by an estate after the owner's death?
• Which type of investment income is exempt from the Net Investment Income Tax?
• All of the following can be considered work-related expenses for the Child and Dependent Care Credit except?
• Which of the following is not subject to the "Nanny Tax"?
• Which of the following expenses qualifies for the Lifetime Learning Credit?
• What is the total qualified deduction that a nurse can take for volunteer work with out-of-pocket expenses of $150 and 55 miles traveled?
• Which amount of interest from a home equity loan can be deducted when part of the loan is used for home improvements?
• What percentage is assessed for the Additional Medicare Tax on income over the threshold?
• What will a married couple with a taxable income of $85,000 and a tax liability of $1,000 receive as a tax refund from the Child Tax Credit?
• What is the penalty for failing to file Form 8938, Statement of Specified Foreign Financial Assets, after receiving a failure to disclose notice?
• For which scenario is a 1040-X form not applicable?
• For a single taxpayer earning wages of $185,000 and self-employment income of $35,000, what is the required amount of Additional Medicare Tax?
• Which factor would NOT influence the valuing of an estate for tax purposes?
• Which of the following is not an exemption for clergy members to pay self-employment taxes?
• What is the minimum amount of support expenses required for claiming a grandmother as a dependent?
• What is the required documentation for cash donations exceeding $250?
• What is the tax implication of receiving a housing allowance for clergy members?
• Which type of income must be earned to qualify for the Child and Dependent Care Credit?
• Which scenario would qualify as a filing status of single?
• Which individual is not eligible for the Premium Tax Credit?
• What is the basis calculation when determining property value includes adjustments for improvements?
• What is the maximum percentage of social security benefits that can be considered taxable income?
• What is the Section 121 exclusion amount for a single individual who sells a primary residence after 18 months due to unemployment?
• Individuals who own what percentage or more of stock in a foreign corporation are subject to the Transition Tax?
• If an individual sells 500 shares of stock without specifying the block, which method is used to determine the cost of shares sold?
• What is the minimum number of days an individual must be present in 2021 to meet the substantial presence test?
• In which scenario is the taxpayer ineligible for the Adoption Credit?
• What is false about the election of net unrealized appreciation (NUA) on a stock sale?
• In the case of a recourse personal loan, how much is taxable if $20,000 is forgiven after a $2,000 balance?
• A taxpayer eligible for and choosing the Advance Premium Tax Credit must do which of the following regarding the filing of a tax return?
• An individual with an Alternative Minimum Tax credit carry forward of $1,200 and a tax liability of $2,500 in 2021 will have how much carry forward available for 2022?
• Which mortgage type is excluded from Qualified Principal Residence Indebtedness?
• What is not a means of removal of green card status?
• Which statement about the miscellaneous deduction of the amortizable premium on taxable bonds is false?
• What is included in the gross estate for tax purposes?
• What is the Additional Medicare Tax owed for a married couple filing jointly with combined salaries of $275,000?
• What is the total reported amount for net gambling winnings if a taxpayer wins $1,000 at card tables and does not meet the reporting thresholds for other winnings?
• What is the characterization of income received by a beneficiary from a decedent's stock sale gain?
• What is the minimum amount of time that must be spent in a primary residence to claim the capital gain tax exemption for a sale of the home?
• When is income from statutory stock options reported?
• If an individual tax return has an understated gross income of 40%, what is the statute of limitations for IRS assessment and collection?
• Which exception does not apply to the time limit for filing an amended return?
• What is the required means of repayment for individuals who claimed the First-time Homebuyer Credit in 2008?
• What is the total self-employment income for an ordained minister earning $35,000 in wages and receiving $800 per month in housing allowance?
• What is one way to prove residency for claiming a dependent?
• In the case of a registered domestic partnership with a qualifying child, who is eligible to claim the child as a dependent?
• At what age can penalty-free withdrawals for medical expenses begin if the unreimbursed amount exceeds 7.5% of AGI?
• When education bond proceeds are used partially for personal expenses, what is the portion considered taxable?
• What is the first day a stock purchased on March 15, 2021, can be sold for long-term capital gain consideration?
• What is the minimum amount of self-employment income that necessitates the filing of a tax return?
• An ordained minister's total income subject to income taxes is comprised of wages plus what additional amount for events?
• What is the total deduction for a couple filing married filing separately, where one itemizes deductions and the other has none?
• What is the total net capital gain for an individual who carried over a long-term capital loss while selling current stocks at gains?
• Individuals do not need to provide estimated tax payments if which of the following is true?
• What is a distribution option available to a nephew inheriting an IRA from an unmarried individual who passed away?
• Which scenario does not qualify as a qualifying child for the Earned Income Tax Credit?
• What is the consequence of claiming a dependent incorrectly?
• For a taxpayer with $5,225 in unreimbursed medical expenses and an AGI of $45,000, what is the maximum allowable deduction?
• What is the eligible Excess Social Security Tax Credit for an individual who has paid over the maximum limit?
• Which of the following is a condition for a U.S. citizen to qualify for the foreign earned income exclusion?
• How long must one hold common stock to qualify for dividends?
• What should a taxpayer do when filing the Alternative Minimum Tax (AMT)?
• What is the taxable estate after accounting for expenses from a gross estate of $950,000 with specified deductions?
• What type of stock does not have a requisite for qualifying dividends, specifically in terms of duration held before the ex-dividend date?
• If a taxpayer has a gross tax liability of $800 and a nonrefundable Adoption Tax Credit of $1,000, what is the amount owed or refund that can be expected?
• What percentage of gambling losses can be used to offset gambling winnings?
• What is not a potential penalty for the willful failure to timely file an FBAR?
• Eligible taxpayers for the qualified business income deduction must be involved in which of the following business types?
• What is the relationship between nontaxable interest and taxable income for social security benefits?
• How should royalties from a book that was not part of an individual's regular job be reported?
• Which type of loan will incur taxable income if forgiven, being defined as a recourse loan?
• Which expense can be claimed by any student under the Lifetime Learning Credit?
• Which scenario is ineligible for the interest exclusion for education savings bonds?
• A self-employed individual with a previous tax liability of $3,900 must pay what minimum amount of prepaid taxes to avoid a penalty?
• What is a requirement for an individual to be considered a qualifying dependent?
• How is the basis for property acquired through inheritance affected if its value decreases after the owner's death?
• If an individual dies before filing their previous year's tax return, which returns must the personal representative file?
• For a dividend reinvestment plan, how much of the taxable portion is recognized if an individual buys 100 shares at $20 each while the market price is $22?
• What minimum percentage of the taxes owed in the current year must be paid to avoid a penalty?
• What is NOT the responsibility of a personal representative of an estate?
• In what way are carryover capital losses treated for the subsequent tax year?
• What must an individual demonstrate to be eligible for the Premium Tax Credit?
• What is the adjusted gross income limit for cash contributions to a public charity which qualifies as a 501(c)3 organization?
• Clergy members who have taken a vow of poverty are exempt from what tax?
• What is the percentage of the excess income over the threshold evaluated for the Additional Medicare Tax?
• Which of the following tax deductions applies specifically to married couples filing jointly?
• What is the maximum credit for a single filer claiming the Retirement Savings Contribution Credit?
• How much is the refund or liability after applying the Child Tax Credit for a married couple with two qualified children?
• What must the adjusted basis be subtracted from to find the gain or loss from the sale of a home?
• If a person receives a tax refund due to an overpayment, what is the correct treatment of the refund?
• How is a life insurance policy treated for estate tax purposes if the named beneficiary dies before the policyholder?
• When a bond is purchased by an individual and a co-owner, who must report interest if only the individual paid for it?
• Which scenario does not qualify as a statutory employee?
• What is the minimum required distribution for an individual with a traditional IRA balance of $410,000 and a distribution period of 22.9?
• Which of the following scenarios does not meet the age requirements for qualification as a dependent?
• Which criterion does not qualify a foreign corporation for the benefits of a comprehensive income tax treaty in the U.S.?
• Which of the following items can individuals claim as a qualified education expense under IRS rules?
• Which distribution from a Roth IRA does not qualify as a qualified distribution?
• What is the main criteria for an individual to qualify for the Earned Income Tax Credit?
• For a married couple, how much of their total gifts can they give to avoid reducing their exemption?
• At what date can a landlord start deducting mortgage interest and other rental expenses for a rental property?
• What is not required to obtain an Adoption Taxpayer Identification Number?
• A married couple filing jointly earns $40,000 and $60,000. What is their qualified business income deduction if the wife has a side business generating $45,000?
• What is the maximum amount of the refundable portion of the American Opportunity Tax Credit (AOTC)?
• If a taxpayer owes $400 in tax and qualifies for an American Opportunity Tax Credit of $2,500, what is the expected refund?
• If a person has unreimbursed medical expenses exceeding the 7.5% threshold, what can they potentially claim?
• Nonresident aliens can deduct all of the following except:
• What is the maximum adjusted gross income limit for qualifying for the Earned Income Credit for taxpayers with three qualifying children?
• What is the total Net Investment Income Tax for an individual with an adjusted gross income of $190,000 and net investment income of $22,000?
• If an estate is valued at $4.5 million, which form does not need to be filed?
• Which statement about the Earned Income Tax Credit is false?
• Who can file an amended return using the 1040-X form?
• What happens when an individual contributes to a dependent care flexible spending arrangement over the limit?
• What is the cost basis of land when purchasing property with renovation expenses included?
• What must a surviving spouse file to claim the deceased spousal unused exclusion?
• Which individual may not be eligible to be claimed as a dependent?
• Which of the following scenarios does not qualify for a reduced exclusion under Section 121?
• How should an 18% service charge included in a restaurant bill for a party over six people be classified for the employee?
• What is the minimum gambling winnings amount that requires reporting from keno?
• Which of the following scenarios does not qualify for the maximum rate of tax on dividends?