Certified Public Accountant Taxation — Individual & Corporate 1 — Questions and Answers
Question 1: For the 2024 tax year, what is the standard deduction amount for a single filer under age 65?
- $12,000
- $13,850
- $14,600 (Correct answer)
- $15,500
Correct answer: $14,600
For 2024, the standard deduction for a single filer under age 65 is $14,600, an increase from the $13,850 amount in 2023.
Question 2: Under the US tax code, what is the maximum tax rate on qualified dividends received by individuals in the highest income bracket?
- 10%
- 15%
- 20% (Correct answer)
- 37%
Correct answer: 20%
Qualified dividends are taxed at a maximum rate of 20% for taxpayers in the highest ordinary income bracket, compared to ordinary income rates up to 37%.
Question 3: A C corporation pays corporate income tax at what flat federal rate under the Tax Cuts and Jobs Act of 2017?
- 21% (Correct answer)
- 25%
- 28%
- 35%
Correct answer: 21%
The Tax Cuts and Jobs Act of 2017 replaced the graduated corporate tax rate structure with a flat 21% federal corporate income tax rate.
Question 4: Which tax form is used by US corporations to file their annual federal income tax return?
- Form 1040
- Form 1120 (Correct answer)
- Form 1065
- Form 1041
Correct answer: Form 1120
US corporations file their federal income tax return using Form 1120 (US Corporation Income Tax Return); S corporations use Form 1120-S.
Question 5: What is the purpose of the IRS Section 179 deduction for businesses?
- Depreciate assets over their useful life
- Immediately expense the cost of qualifying business assets (Correct answer)
- Defer gain on like-kind exchanges
- Deduct losses in excess of at-risk amounts
Correct answer: Immediately expense the cost of qualifying business assets
Section 179 allows businesses to immediately deduct the full cost of qualifying depreciable assets in the year placed in service, subject to annual dollar limits.
Question 6: Under the passive activity loss rules (IRC Section 469), when can a real estate professional deduct rental losses against ordinary income without limitation?
- When rental income exceeds $25,000
- When the taxpayer materially participates in real property trades or businesses (Correct answer)
- When the rental property is located in a Qualified Opportunity Zone
- When the taxpayer's AGI is below $100,000
Correct answer: When the taxpayer materially participates in real property trades or businesses
A qualifying real estate professional who spends more than 750 hours and more than half of their personal service time in real property activities can deduct rental losses against ordinary income.
Certified Public Accountant Taxation — Individual & Corporate 1
For the 2024 tax year, what is the standard deduction amount for a single filer under age 65?