Taxable and Nontaxable Income Quiz

How is prepaid income generally included in your income?

• In the year you receive it.

• In the year after you receive it.

• Only if it is over a certain amount.

• Only if it is received in cash.

What must be included in gross income for personal services?

• Only wages and salaries

• Wages, salaries, commissions, fees, and tips

• Only commissions and fees

• Only stock options

What type of entity is an S corporation in terms of taxation?

• A taxable entity

• A non-taxable entity

• A partnership

• A sole proprietorship

What happens to the basis of your S corporation stock when items are passed through to you?

• It remains the same

• It increases or decreases

• It only increases

• It only decreases

What must be passed through to partners in a partnership?

• Only income

• Income, gains, losses, deductions, and credits

• Only losses

• Only deductions

What is the purpose of Form 1065?

• To report individual income

• To report partnership income

• To report corporate income

• To report royalty income

What is the purpose of Form 1120-S?

• To report individual income

• To report partnership income

• To report S corporation income

• To report royalty income

How often is the standard deduction adjusted?

• Every month

• Every year

• Every five years

• Never

What is the significance of being 65 or older in terms of the standard deduction?

• No significance

• May qualify for an additional deduction

• Reduces the deduction

• Eliminates the deduction

If you are blind at the end of the tax year, what additional deduction are you allowed?

• No additional deduction

• An additional deduction equal to the basic standard deduction

• An additional deduction for blindness

• A deduction only if you are also 65 or older