Practice Quiz

CompTIA PDI+ Exam Prep - Question List

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6. Mrs. Domino made deductible contributions to traditional individual retirement accounts for several years. Mrs. Domino decides to withdraw $10,000 from one of her accounts in 2004. Mrs. Domino is 61years old. How does this transaction affect Mrs. Domino’s 2004 tax return for 2004?
  1. Mrs. Domino must report the entire amount of $10,000
  2. Mrs. Domino does not have to report anything because she is older than 59½ years
  3. Mrs. Domino does not have to report any amount because this was not withdrawn from a Roth IRA
  4. Mrs. Domino must report all of the distribution received but can elect to use the 10-year option
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7. Randy Lee is an ordained minister of a tax-exempt church. Randy receives a salary plus a housing allowance for rent and utilities. Which of the following statements is correct?
  1. Randy must claim as income on his return all of his salary and all of his housing allowance. The salary is subject to income tax and selfemployment tax but his housing allowance is subject to income tax only
  2. Randy does not have to report any income received from the church because the church is tax exempt
  3. Randy has to pay both income tax and selfemployment tax on his salary, but only selfemployment tax for the housing allowance. The housing allowance is not subject to income tax
  4. Randy only has to pay the self-employment tax on both his salary and the housing allowance. Neither is subject to income tax
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8. Tom Brown, who is single, owns a rental apartment building property. This is the only rental property that Tom owns. He “actively participates” in this rental activity as he collects the rents and performs ordinary and necessary repairs. In 2004, Tom had a loss of $30,000 on this rental activity and had no reportable passive income. His adjusted gross income, without regard to this rental loss, is $60,000. How much of the rental loss may Tom deduct on his 2004 return?
  1. $30,000
  2. $25,000
  3. $0
  4. $6,000
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9. Which of the following costs incurred on rental property should be classified as a capital improvement?
  1. Replacing a 20-year-old roof
  2. Repainting all of the interior walls
  3. Refinishing the existing wood floors
  4. Replacing a broken window pane
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10. The Becks own and operate an assisted-living facility. They provide maid service and meals in a common dining room. Where should they report the income and expenses from this activity?
  1. Other Income on Form 1040 and expenses as itemized deductions on Schedule A
  2. Income and expenses on Schedule E, Supplemental Income and Loss
  3. Income and expenses on Schedule C, Profit or Loss from Business
  4. Short-term capital gain on Schedule D
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