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1. Look at the Form 540 you prepared for Rodolfo and Anna Ramirez. What is the amount on Form 540, Line 18?
- [ ] a. A. $ 262.
- [ ] b. B. $ 13,084.
- [ ] c. C. $ 12,663.
- [ ] d. D. $ 32,143.
2. Look at the Form 540 you prepared for Rodolfo and Anna Ramirez. What is the amount on Form 540, Line 66?
- [ ] a. A. $ 197.
- [ ] b. B. $ -0-.
- [ ] c. C. $ 205.
- [ ] d. D. $ 213.
3. For California, married or an RDP and filing separate returns, you and your spouse/RDP must either both itemize your deductions or both must take the standard deduction.
4. For California, decide whether to itemize your charitable contributions, medical expenses, interest paid, taxes, etc., or take the standard deduction. Your California income tax will be less if you take
- [ ] a. A. Your California itemized deductions.
- [ ] b. B. Your California standard deduction.
- [ ] c. C. The larger of A or B above.
- [ ] d. D. None of the above.
5. Lucy will itemize her deductions for tax year 2008. She was single for all of 2008. Her total adjusted gross income was $150,000. Her total federal itemized deductions were $11,978 of which are the following amounts from federal Schedule A: line 5: $668.00, line 6: $950, line 8: $500, and line 14: $9,860. What are her total itemize deductions allowed for California?
- [ ] a. A. $11,978.
- [ ] b. B. $10,810.
- [ ] c. C. $11,310.
- [ ] d. D. $-0-.
6. Miriam and her husband decide to itemize in tax year 2008. Their total deductible itemized deductions totaled to $8,500. Their Federal standard deduction for MFJ is $10,900 but their California standard deduction is only $7,384. For them it is a better benefit to claim the standard deduction for federal and
- [ ] a. A. Due to the conflict, not do a return for California at all.
- [ ] b. B. Also claim the standard deduction for California.
- [ ] c. C. Itemize their deductions for California.
- [ ] d. D. None of the above.
7. Jeff, 27, is a single man who earned $24,000 in tax year 2008. His itemize deductions amounts are the following: $346 in General sales tax calculation (based on his living LA county), $200 deductible DMV motor vehicle tax. He had a total of $5,654 in medical expenses and after the limit he can deduct only $3,854 in medical expenses. A total of $4,400 in itemize deductions. Jeff decides that its best for him to itemize his deductions on his California return but not on federal. What should he do?
- [ ] a. A. Complete a federal Schedule A to calculate the results to enter on his Schedule CA (540).
- [ ] b. B. Attach federal Schedule A to the back of his California return.
- [ ] c. C. He can use the standard deduction and also itemize his deductions, but not both.
- [ ] d. D. Both A and B above.
8. If you did not itemize your deductions on your federal income tax return but will itemize your deductions for your California Form 540/540A, first complete a sample federal Schedule A.
9. Toby, age 25, is a single man. He will itemize his deductions for tax year 2008. His total adjusted gross income was $199,000. He takes care of his nephew and provided all the support for him and meets all the tests to qualify for the head of household filing status. His total itemized deductions are $27,591. The following amounts are from federal Schedule A: line 5: $1,221.00, line 6: $950, line 8: $500, line 10: $10,000,line 13: $450, line 14: $10,450, line 19: $3,000, and line 26: $1,020. What are his total itemize deductions allowed for California?
- [ ] a. A. $ 27,591.
- [ ] b. B. $ 26,370.
- [ ] c. C. $ 25,810.
- [ ] d. D. $ 24,322.
10. What is the California Standard deduction amount for a dependent who earned $4,000 from her job.
- [ ] a. A. $ 4,300.
- [ ] b. B. $ 900.
- [ ] c. C. $ 4,000.
- [ ] d. D. $ 3,692.
11. Look at the Form 540 you prepared for Mukesh and Sarita. What is the amount on Form 540, Line 18?
- [ ] a. A. $ 9,530.
- [ ] b. B. $ 7,032.
- [ ] c. C. $ 9,330.
- [ ] d. D. $ 9,816.
12. Look at the Form 540 you prepared for Mukesh and Sarita. What is the amount on Form 540, Line 66?
- [ ] a. A. $ 131.
- [ ] b. B. $ 141.
- [ ] c. C. $ 2.
- [ ] d. D. $ 135.
13. For California, RDPs have the same legal benefits, protections, and responsibilities as married couples unless otherwise specified.
14. If you received a tax-free HSA distribution for qualified medical expenses, enter the qualified expenses paid that exceed 7.5% of federal AGI as an adjustment to your California itemized deductions.
15. If you receive a tax-free HSA distribution for qualified medical expenses, enter the qualified expense paid that exceed 7.5% of federal AGI as an adjustment to itemized deductions. To determine the amount of the California itemized deduction adjustment
- [ ] a. A. Calculate the medical expense deduction for California.
- [ ] b. B. Calculate the medical expense deduction for federal.
- [ ] c. C. Subtract the federal amount from the California amount and enter the amount on line 41, as a positive amount.
- [ ] d. D. All of the above
16. Federal law allows a deduction for contributions to an HSA account. California conforms to this provision.
17. Look at the Form 540 you prepared for John Soler. What is the amount on Form 540, Line 18?
- [ ] a. A. $ 3,516.
- [ ] b. B. $ 15,645.
- [ ] c. C. $ 16,027.
- [ ] d. D. $ 16,058.
18. Look at the Form 540 you prepared for John Soler. What is the amount on Form 540, Line 62?
- [ ] a. A. $ 430.
- [ ] b. B. $ 28.
- [ ] c. C. $ 20.
- [ ] d. D. $ 19.
19. If you did not itemize deductions on your federal tax return but still itemize deductions on your California tax return, first complete federal Schedule A (Form 1040) and then complete Schedule CA (Form 540).
20. California taxes the state income tax refund received in 2008.
21. Enter on line 39 of Schedule CA (Form 540) state, local, foreign income taxes, and general sales tax.
22. FTB allows taxpayers to elect to claim either local general sales and use taxes or state and local income taxes as an itemized deduction.
23. FTB allows a deduction for foreign income taxes as an itemized deduction amount.
24. If you did not itemize deductions on your federal tax return, you cannot itemize deductions for California.
25. Federal estate tax paid on income in respect of decedent is not deductible for California.
26. Tax paid on generation skipping transfers is deductible under California law.
27. Look at the Form 540 you prepared for Maria. What is the amount on Form 540, Line 18?
- [ ] a. A. $ 11,217.
- [ ] b. B. $ 11,456.
- [ ] c. C. $ 11,043.
- [ ] d. D. None of the above.
28. Look at the Form 540 you prepared for Maria. What is the amount on Form 540, Line 62?
- [ ] a. A. $ 90.
- [ ] b. B. $ 98.
- [ ] c. C. $ 94.
- [ ] d. D. $ 73.
29. Your California deduction for investment interest may be different from your federal deduction. Use __________ to figure the amount to enter on line 41.
- [ ] a. A. FTB 3526.
- [ ] b. B. FTB 3807.
- [ ] c. C. FTB 3506.
- [ ] d. D. FTB 2441.
30. Your California interest expense deduction may be different from your federal deduction. A deduction is allowed for interest paid on any loan or financed indebtedness from a utility company to purchase energy efficient equipment and products for California residences.
31. Taxpayers are allowed a tax deduction for interest paid or incurred on a public utility company financed loan that is used to purchase and install energy efficient equipment or products, including zone-heating products for a qualified residence located in California. Federal law has an equivalent deduction.
32. You may claim expenses related to producing income taxed by California law but not taxed under federal law by entering the amount as a positive number on line 41.
33. If you took the deduction for private mortgage insurance (PMI) on Schedule A (Form 1040), line 13, then subtract the amount on line 41 of Schedule CA (540).
34. If you reduced your federal mortgage interest deduction by the amount of your mortgage interest credit (from federal Form 8396, Mortgage Interest Credit),
- [ ] a. A. Increase your California itemized deductions by the same amount.
- [ ] b. B. Decrease your California itemized deductions by the same amount.
- [ ] c. C. Don't do anything, because California coincides with federal rules and allows this credit.
- [ ] d. D. None of the above.
35. Look at the Form 540 you prepared for Martin and Norma. What is the amount on Form 540, Line 18?
- [ ] a. A. $ 11,607.
- [ ] b. B. $ 10,915.
- [ ] c. C. $ 11,200.
- [ ] d. D. None of the above.
36. Look at the Form 540 you prepared for Martin and Norma. What is the amount on Form 540, Line 66?
- [ ] a. A. $120.
- [ ] b. B. $15
- [ ] c. C. $7
- [ ] d. D. None of the above.
37. If deducting a prior year charitable contribution carryover, and the California carryover is larger than the federal carryover, enter the additional amount as a positive number on line 41 of Schedule CA (Form 540).
38. Your California deduction may be different from your federal deduction. California limits the amount of your charitable qualified contribution deduction to _____ of your federal adjusted gross income.
- [ ] a. A. 20%
- [ ] b. B. 30%
- [ ] c. C. 40%
- [ ] d. D. 50%
39. If deducting a charitable contribution carryover of appreciated stock donated to a private operating foundation prior to 01/01/2002 and the fair market value allowed for federal purposes is larger than the basis allowed for California purposes, enter the difference as a positive number on line 41 of Schedule CA (Form 540).
40. Figure the difference between the amount allowed for California charitable contribution deductions using federal law and the amount allowed using California law.