1
Directions: This is an open book exam. You may use your textbook, Blackboard handouts,
midterm or you own notes during the exam. You may not discuss
... [Show More] or communicate with
anyone during the administration of the exam.
There are 11 pages, including this cover, in total. If you are missing a page please let me
know immediately. The exam will be held from 10:30AM until 12:35PM. There are 30
multiple-choice questions. All questions are equally weighed.
Please type your first and last name in the Answer key. After reading each question please
mark the letter you believe indicates the best answer on the Answer key. If you feel
additional information is needed please indicate such information on the answer key (in
the column designated as Comments) or in a separate document and clearly indicate what
question(s) you are addressing. Remember to save your work on your Answer key file.
If two answers are indicated or if the answer is vague no credit will be given.
Unless indicated otherwise, always use the IRC rules and rates in effect for the 2020 tax
year. For medical expenses use the threshold of 7.5% of AGI. Assume all related party
transactions are subject to IRC 267. Modified AGI is also assumed to be equal to AGI
unless otherwise indicated. Always assume that a taxpayer will take the most favorable
position possible and take any and all elections that are helpful.
Email or fax (718-301-2246) the Answer Key and Exam to me by 12:45pm. Points will be
reduced significantly for late submission.
Good luck.
JNW
FEDERAL INCOME TAX
FINAL SPRING 2021
2
***********FACT PATTERN QUESTONS 1-3 ON THIS PAGE***********
George is a new client. He is 56 years old. His spouse passed away during 2019. George has not remarried.
He maintains a household for himself and his dependent child. His home is 112 Maple Avenue. He
purchased the home in 2017 and took out a mortgage in the amount of $500,000. George’s 2020 AGI is
$265,000. He provides you with a draft tax 2020 return he prepared for your review. The draft took into
account the following expenditures incurred in 2020.
Medical expenses $27,000
Interest on home mortgage $25,500
State income tax $14,500
State sales tax $4,500
Real estate tax $1,600
Charitable contribution $6,500
1. What is George’s filing status for 2020?
(a) Single
(b) Married Filing Jointly
(c) Head of Household
(d) Surviving Spouse/Qualifying Widower
(e) More information regarding his prior years filing status is required.
2. Which of the following statements is most accurate (based on the initial information provided) for the
2020 tax return?
(a) | The amount George can deduct via a standard deduction will be greater than the amount he can
deduct by itemizing his deductions on Scheduled A.
The amount George can deduct via a standard deduction will be less than the amount he can
deduct by itemizing his deductions on Scheduled A.
George cannot itemize his deductions if he and his spouse took a standard deduction in 2019.
None of the above.
(b)
(c)
(d) 3. After reviewing the draft 2020 tax return you learn that George moved out of the Maple Avenue home
shortly after his spouse died. George (and his dependent child) lived at the home for only 11 days during
2020. The Maple Avenue residence was rented for 180 days during 2020. The rental income was $10,000.
The property was vacant for the remainder of the year. Which of the following statement are most
accurate:
(a) | The amount George can deduct via a standard deduction will be greater than the amount he can
deduct by itemizing his deductions on Scheduled A.
The amount George can deduct via a standard deduction will be less than the amount he can
deduct by itemizing h [Show Less]