Deck 22: Applications in Personal Financial Planning in Special Circumstances

Question 1

Which of the following are not a benefit of a sole proprietorship?

A)Availability of pension plans.
B)Conduit taxation.
C)Lack of business continuity.
D)No legal formalities.

Answer 1

C

Question 2

The Section 121 exclusions is allowed:

A)Once every four years.
B)Once every two years.
C)To a surviving spouse up to three years.
D)To a surviving spouse up to one year.

Answer 2

B

Question 3

Which of the following is not a benefit provided by a Business Overhead Expense insurance policy?

A)Employee salary.
B)Office supplies.
C)Owner salary.
D)Utilities.

Answer 3

C

Question 4

Payments for child support are _____ to the payee and _____ by the payor.

A)Nontaxable / deductible.
B)Nontaxable / nondeductible.
C)Taxable / nondeductible.
D)Taxable / deductible.

Question 5

Which of the following will qualify as alimony?

A)Cash payments to third parties.
B)Promissory notes.
C)Property.
D)Services.

Question 6

Which of the following is an association of two or more owners to carry on a trade or business for profit and the owners are personally liable for malpractice-related claims resulting from negligence or misconduct?

A)Corporation.
B)General Partnership.
C)Limited Liability Partnership.
D)Sole Proprietorship.

Question 7

A single-member LLC is automatically considered to be:

A)Corporation.
B)Limited Partnership.
C)Limited Liability Limited Partnership.
D)Sole proprietorship.

Question 8

Which of the following unforeseen circumstances is eligible for a partial exclusion under Section 121?

A)Change in employment.
B)Legal separation.
C)Work-related move if the taxpayer's new employment is more than 20 miles away from the principal residence (working from home).
D)Work-related move if the taxpayer's new employment is more than 100 miles away from the former place of employment.