The Microsoft Corporation
Comprehensive Income Tax Course: Module 2 Final Exam
1.
Fred prepared his own tax return last year. This year Fred decided to have his tax return prepared by a professional. During the interview process Fred’s tax preparer realized Fred needs to repay the education credit he took for his son last year. For which of the following reasons would a taxpayer be required to repay an education credit?
a) Taxpayer received a refund of personal living expenses
b) Taxpayer received tax-free educational assistance for an expense used to calculate a higher education credit on their return
c) Taxpayer received a refund of transportation expenses
d) Taxpayer received a gift from relative to help pay the lodging expenses
2.
Where should the repayment of the education credit Fred claimed in a previous year be reported? a)
b)
c)
d)
3.
Mr. Smith’s neighbor tells him about the mortgage interest credit he took on his return. Now
Mr. Smith wonders if he is also eligible for a mortgage interest credit. He checks with his tax preparer to find out what would make him eligible. Which of the following would qualify a taxpayer for a mortgage interest credit?
a)
b)
c)
d)
4.
Owned a home
Paid mortgage interest
Received a mortgage credit certificate
Files a Schedule A
Which of the following is an invalid condition in which Mr. Smith’s mortgage credit certificate must be used?
a)
b)
c)
d)
5.
On Form 8863
Is not reported
On line 44, Form 1040
On an amended return for the year the credit was claimed
The purchase of the certificate holder’s main home
The qualified rehabilitation of the certificate holder’s main home
Qualified home improvement of the certificate holder’s main home
The qualified refinancing of the certificate holder’s main home
Ellen and her husband separated in November. She wants to be able to claim the child and dependent care credit for her 6-year son who lives with her. Which of the following is not one of
1.
Fred prepared his own tax return last year. This year Fred decided to have his tax return prepared by a professional. During the interview process Fred’s tax preparer realized Fred needs to repay the education credit he took for his son last year. For which of the following reasons would a taxpayer be required to repay an education credit?
a) Taxpayer received a refund of personal living expenses
b) Taxpayer received tax-free educational assistance for an expense used to calculate a higher education credit on their return
c) Taxpayer received a refund of transportation expenses
d) Taxpayer received a gift from relative to help pay the lodging expenses
2.
Where should the repayment of the education credit Fred claimed in a previous year be reported? a)
b)
c)
d)
3.
Mr. Smith’s neighbor tells him about the mortgage interest credit he took on his return. Now
Mr. Smith wonders if he is also eligible for a mortgage interest credit. He checks with his tax preparer to find out what would make him eligible. Which of the following would qualify a taxpayer for a mortgage interest credit?
a)
b)
c)
d)
4.
Owned a home
Paid mortgage interest
Received a mortgage credit certificate
Files a Schedule A
Which of the following is an invalid condition in which Mr. Smith’s mortgage credit certificate must be used?
a)
b)
c)
d)
5.
On Form 8863
Is not reported
On line 44, Form 1040
On an amended return for the year the credit was claimed
The purchase of the certificate holder’s main home
The qualified rehabilitation of the certificate holder’s main home
Qualified home improvement of the certificate holder’s main home
The qualified refinancing of the certificate holder’s main home
Ellen and her husband separated in November. She wants to be able to claim the child and dependent care credit for her 6-year son who lives with her. Which of the following is not one of