1 Which of the following is taxable?
A. Refunds of state income tax claimed in the prior year as an itemized deduction
B. A $5,000 gift
C. Compensatory damages for physical injuries
D. A $10,000 inheritance
2 Which of the following portions of a scholarship would be taxable?
A. Tuition
B. Fees
C. Books and course-required supplies
D. Room and board
3 Which type of debt cancellation is taxable in 2012?
A. The discharge of up to $2 million of qualified resident indebtedness
B. Forgiveness of student loan due to taxpayer agreeing to work in a rural area.
C. Debt cancelled by the court in a Title 11 bankruptcy
D. Cancellation of credit card debt
4 A taxpayer cashes in a certificate of deposit early and incurs a penalty. How can the penalty be deducted from income?
A. Net against the interest on Line 8A of Form 1040
B. It can be deducted on Schedule A
C. Interest penalties are nondeductible
D. Line 30 of Form 1040
5 Which US Savings bonds no longer earn interest?
A. Series I Bonds
B. Series E Bonds
C. Series EE Bonds
D. Municipal Bonds
6 Cory received $10,000 in disability benefits in 2012 from a disability plan he contributed to with after-tax dollars. He is single and his taxable income for 2012 is $45,000 including his disability income. What is the maximum tax bracket that the disability benefits could be taxed at?
A. 0 percent
B. 10 percent
C. 15 percent
D. 25 percent
7 Katelyn, a 33-year-old doctor (not a key employee), is provided with $150,000 of group life insurance in 2012. How much would Katelyn have to pay for her 2012 excess group life insurance benefit?
A. $8,000
B. $800
C. $960
D. $1,080
8 In what box is taxpayers' federal tax withholding shown on their W-2?
A. 19
B. 17
C. 1
D. 2