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Last Updated: Oct 28, 2026
No. of Questions: 70 Questions & Answers with Testing Engine
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| Section | Weight | Objectives |
|---|---|---|
| Topic 1: Business Law | 10–20% | - Business structure law
|
| Topic 2: Federal Taxation of Individuals | 15–25% | - Individual income taxation
|
| Topic 3: Ethics, Professional Responsibilities, and Federal Tax Procedures | 15–25% | - Ethics and professional conduct
|
| Topic 4: Federal Taxation of Entities | 18–28% | - Business entity taxation
|
| Topic 5: Federal Taxation of Property Transactions | 12–22% | - Property transactions
|
Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
Tom's 1994 wages were $53,000. In addition, Tom's employer provided group-term life insurance on
Tom's life in excess of $50,000. The value of such excess coverage was $2,000.
Correct Answer: C 🗳️
Explanation: Only visible for TopExamCollection members. You can sign-up / login (it's free).
Smith made a gift of property to Thompson. Smith's basis in the property was $1,200. The fair market
value at the time of the gift was $1,400. Thompson sold the property for $2,500. What was the amount of
Thompson's gain on the disposition?
Correct Answer: B 🗳️
Explanation: Only visible for TopExamCollection members. You can sign-up / login (it's free).
In which of the following situations may taxpayers file as married filing jointly?
Correct Answer: C 🗳️
Explanation: Only visible for TopExamCollection members. You can sign-up / login (it's free).
Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
Tom received $10,000, consisting of $5,000 each of principal and interest, when he redeemed a Series
EE savings bond in 1994. The bond was issued in his name in 1990 and the proceeds were used to pay
for Laura's college tuition. Tom had not elected to report the yearly increases in the value of the bond.
Correct Answer: C 🗳️
Explanation: Only visible for TopExamCollection members. You can sign-up / login (it's free).
Dale received $1,000 in 1990 for jury duty. In exchange for regular compensation from her employer
during the period of jury service, Dale was required to remit the entire $1,000 to her employer in 1990. In
Dale's 1990 income tax return, the $1,000 jury duty fee should be:
Correct Answer: A 🗳️
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