Practice Quiz

CPA Accountant Review Questions

Category - Tax Preparation

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A taxpayer goes to a casino and wins $10,000. The casino withholds $500 for Federal income taxes. What is the proper tax treatment by the taxpayer?
  1. The taxpayer must report the winnings and can claim the amount of Federal income tax withheld on Form 1040
  2. The taxpayer does not have to report the winnings because the taxpayer did not receive a Form 1099G from the casino
  3. The taxpayer is not required to report the winnings on the taxpayer’s Form 1040 unless the taxpayer wants to claim the withholding on the Form 1040
  4. The taxpayer must report the winnings on the taxpayer’s Form 1040, but the taxpayer may not claim the amount of Federal income tax withheld unless the taxpayer itemizes deductions
Explanation
Answer: A - The taxpayer must report the winnings and can claim the amount of Federal income tax withheld on Form 1040
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