Practice Test Geeks(CA) Certified Accountant Practice Test
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Taxation & Regulatory Compliance Flashcards

7 cards from real CA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Taxation & Regulatory Compliance flashcards as text

  1. A corporation with a fiscal year ending March 31 must file its federal income tax return by which date (without extension)?

    Answer: July 15

    C-corporations must file Form 1120 by the 15th day of the fourth month after the fiscal year ends, so March 31 year-end → July 15.

  2. Under IRC Section 1231, which of the following assets would be classified as a Section 1231 asset when held for more than one year?

    Answer: Depreciable business equipment

    Section 1231 assets include depreciable property and real property used in a trade or business and held for more than one year; inventory and receivables are excluded.

  3. Which penalty applies when a taxpayer substantially understates income tax (understating by more than $5,000 or 10% of correct tax)?

    Answer: Accuracy-related penalty of 20% of underpayment

    IRC Section 6662 imposes a 20% accuracy-related penalty on the underpayment attributable to a substantial understatement of income tax.

  4. A calendar-year individual taxpayer must make estimated tax payments if expected tax liability after withholding will exceed:

    Answer: $1,000

    Under IRC Section 6654, estimated tax payments are required if the taxpayer expects to owe at least $1,000 in tax after withholding and credits.

  5. For federal income tax purposes, a passive activity loss can generally be deducted against:

    Answer: Passive income only

    Under IRC Section 469, passive activity losses can only offset passive activity income; excess losses are suspended until the activity is disposed of.

  6. Which filing status provides the most favorable tax rates for a qualifying taxpayer?

    Answer: Married Filing Jointly

    Married Filing Jointly generally provides the widest tax brackets and lowest effective rates among all filing statuses.

  7. Under the constructive receipt doctrine, a cash-basis taxpayer must recognize income when it is:

    Answer: Made available without restriction

    Constructive receipt requires income recognition when funds are credited to the taxpayer's account or made available without substantial limitation, even if not physically received.