Practice Quiz

RTRP - IRS Registered Tax Return Preparer Test - Question List

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31. Jim’s Jeans is located in Florida and hopes to tap into the spending of the state’s retired population. Jim’s Jeans pays a tax rate of 35% and their income before taxes and extraordinary items was $400,000. If Jim’s Jeans suffered a tax-deductible extraordinary loss of $100,000, what is their net income?
  1. $185,000
  2. $105,000
  3. $260,000
  4. $300,000
  5. $195,000
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32.
Dr. Brokealot deposits $25,000 into a bank account in the name of his corporate veterinary hospital, in exchange for shares of stock in the corporation. What effect would this have on the accounting equation?
  1. Increase owner equity on the right side of the equation, decrease assets on the left side of the equation
  2. Decrease assets on the left side of the equation and increase owner equity of the right side of the equation
  3. Increase owner equity on the left side of the equation, and increase assets on the left side of the equation
  4. Increase asset on left side of the equation, and increase owner equity on the right side of the equation
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33. All bills dealing with taxation issues must:
  1. Begin in the Senate
  2. Begin in the House of Representatives
  3. Be introduced at the same time in both the House and the Senate.
  4. Be proposed by the President.
  5. Preliminarily cleared by the Supreme Court.
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34. William and Bill jointly own a business. William hates Bill and had decided to sell his share of the business to Bill to avoid seeing him daily. However, he is concerned about gift taxation and their buy-sell agreement. Under what condition would there be owed taxes?
  1. If William just gives his portion of the business to Bill.
  2. If William sells to someone other than Bill.
  3. If William pays under fair market value.
  4. All of the above.
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35. The term “gross-up” deals with the taxation of what?
  1. Income
  2. Gifts
  3. Property costs
  4. General taxation
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