1. Look at the Form 1040 you prepared for John Soler. What is the amount on Form 1040, Line 40?

a. $ 5,350.
b. $ 16,058.
c. $ 15,836. 
d. $ 16,471.

2. Look at the Form 1040 you prepared for John Soler. What is the amount on Form 1040, Line 76?

a. $ 2,004.
b. $ 399.
c. $ 429. 
d. $ -0-.

3. The deduction for state and local general sales taxes that you can elect to take as an itemized deduction on Schedule A (Form 1040) instead of state and local income taxes was extended through 2007.                          

True False

4. An Indian tribal government that is recognized by the Secretary of the Treasury as performing substantial government functions will be treated as

a. a separate nation for purposes of claiming a deduction for taxes.
b. a separate nation for legal purposes.
c. a state for purposes of claiming a deduction for taxes.
d. a casino territory for purposes of claiming a deduction for taxes.

5. These are taxes imposed at one rate on retail sales of a broad range of classes of items.

a. Foreign taxes.
b. General sales taxes.
c. Income taxes.
d. Stamp taxes.

6. These are taxes imposed by a foreign country or any of its political subdivisions.

a. Foreign taxes.
b. General sales taxes.
c. Income taxes.
d. Stamp taxes.

7. Generally, you can deduct only taxes that are

a. a cost-of-living allowances.
b. exempt from federal tax.
c. exempt from state tax.
d. imposed on you.

8. Generally, you can deduct property taxes

a. only if you are an owner of the property.
b. of a property that your spouse owns and you are filing separately.
c. of a property owned by your dependents.
d. of a property owned by your family members.

9. If you are a cash basis taxpayer, you can deduct

a. only those taxes you paid with cash.
b. those taxes which you incurred a liability for during your tax year..
c. only those taxes you actually paid during your tax year.
d. all of the above.

10. You can deduct state and local income taxes you paid on income that is exempt from federal income tax.              

True False

11. Lola made an estimated state income tax payment. The estimate of her state tax liability shows that she will get a refund of the full amount of her estimated payment. Lola had no reasonable basis to believe that she had any additional liability for state income taxes.

a. Lola cannot deduct the estimated tax payment.
b. Lola can deduct the estimated tax payment.
c. Lola can deduct the estimated tax payment for the following year.
d. Since Lola is getting a refund for this year, she can apply the estimated payment to a prior year in which she had a liability.

12. You can deduct any part of a refund of a prior year state or local income taxes that you chose to have credited to your 2007 estimated state or local income taxes. Do not reduce your deduction by

a. any state or local income tax refund (or credit) you expect to receive in 2007.
b. any refund of (or credit for) prior-year state and local income taxes you actually received in 2007.
c. either of A or B.
d. None of the above.

13. If you and your spouse file separate state, local, and federal income tax returns, you can

a. each deduct only the amount of your own state and local income tax that you paid during the tax year.
b. each choose who will deduct the total of state and local income tax that you paid during the tax year.
c. each deduct one half of the total amount of state and local income taxes that you both paid during the year.
d. None of the above.

14. Deductible real estate taxes are any state, local, or foreign taxes on real property levied for the general public welfare. You can deduct these taxes

a. only if they are based on the assessed value of the real property.
b. only if charged uniformly against all property under the jurisdiction of the taxing authority.
c. charged for local benefits and improvements that increase the value of the property.
d. Both A and B are correct.

15. Divide delinquent taxes between the buyer and seller that are for real property tax years before the one in which the property is sold.                     

True False

16. Service charges used to maintain or improve services (such as trash collection or police and fire protection) are deductible as real estate taxes if

a. the fees or charges are imposed at a like rate against all property in the taxing jurisdiction.
b. The funds collected are not earmarked; instead, they are commingled with general revenue funds.
c. Funds used to maintain or improve services are not limited to or determined by the amount of these fees or charges collected.
d. all of the above

17. For any tax to be deductible by you, the tax

a. must be imposed on you.
b. must be paid by you during the year.
c. Both A and B must happen.
d. none of the above.

18. When a property is sold, the seller pays for his part of real estate taxes and decides that he is going to be nice and also pays the buyer's allocated portion of taxes. Who can deduct the buyer's taxes?

a. The seller because he paid for them.
b. The buyer because the taxes were imposed on him.
c. Neither the buyer because although they were imposed on him, he didn't actually pay them, nor the seller because although he actually paid them, it was not his obligation.
d. Either a or b is correct.

19. You can deduct certain taxes only if they are ordinary and necessary expenses of your trade or business or of producing income. These taxes fall under the category of

a. Income taxes.
b. Personal property taxes.
c. Business taxes.
d. General sales taxes.

20. You can deduct any part of a refund of prior-year state or local income taxes that you chose to have credited to your 2007 estimated state or local income taxes. Do not

a. Reduce your deduction by any state or local income tax refund you expect to receive for 2007.
b. Reduce your deduction by any refund of prior year state and local income taxes you actually receive in 2007.
c. Reduce your deduction by any state or local income tax credit you expect to receive for 2007.
d. All of the above.

21. The taxes that are deductible as itemized deductions include all of the following except:

a. Real estate taxes based on the assessed value of the property and charged uniformly against all property.
b. General sales taxes.
c. Taxes you paid on property owned by someone else such as your uncle.
d. Personal property taxes based on the value of the personal property.

22. You can deduct estimated tax payments your made during the year to a state or local government. However, you must 

a. Have the tax be imposed on you.
b. Have a reasonable basis for making the estimated payments.
c. Have paid the tax during the year.
d. Show that the estimate of your state tax liability will result in a refund to be able to make an estimated payment.

23. Income taxes, real estate taxes, and personal property taxes that you paid to an Indian tribal government are

a. Allowed because Indian tribes are located within this country and that is all that matters.
b. Allowed only if recognized by the Secretary of the Treasury as performing substantial government functions.
c. Not allowed because Indian tribes are considered another nation and they don't accept our government as theirs.
d. None of the above

24. You cannot deduct federal excise taxes on Schedule A such as tax on gasoline, unless

a. you get permission from the IRS to do so.
b. you are the property owner of that exempt property
c. They are ordinary and necessary expenses of an income producing activity.
d. None of the above

25. If you are a minister or a member of the military and receive a housing allowance that you can exclude from income, you

a. Don't need to file a return because ministers get everything free of charge from their congregation.
b. Don't need to file Schedule A because military personnel don't usually itemize.
c. Cannot deduct any of the real estate taxes you pay on your home.
d. Still can deduct all of the real estate property taxes on Schedule A that you pay on your home.

26. Personal property tax is a deductible on Schedule A, if it is a state or local tax that is

a. Charged on personal property.
b. Based only on the value of the personal property.
c. Charged on a yearly basis, even if it is collected more or less than once a year.
d. All of the above.

27.  If you elect to deduct state and local general sales taxes on your Schedule A

a. You don't need to check box b on Schedule A, line 5.
b. You can deduct both general sales taxes and state/local income taxes.
c. You can deduct state and local general sales taxes instead of state and local income taxes, but not both.
d. None of the above.

28. Many federal, state, and local government taxes are not deductible because they do not fall within certain categories. Other taxes and fees, such as federal income taxes, are not deductible because the tax law specifically prohibits a deduction for them. The following taxes and fees are not deductible on schedule A except

a. Estate, inheritance, gift, legacy or succession taxes.
b. General sales taxes.
c. License fees such as marriage, driver's, and dog license.
d. Social security and other employment taxes for household workers.

29. To figure you state and local general sales taxes deduction on Schedule A,

a. you can use your actual expenses.
b. you can use the optional sales tax tables.
c. you can use your state and local income taxes withheld.
d. both a and b are correct.

30.  If you and your spouse held property as tenants by the entirety and you file separate federal returns, each of you can deduct only the taxes each of you paid on the property.

True False

31. Look at the Form 540 you prepared for John Soler. What is the amount on Form 540, Line 18?

a. $ 3,516.
b. $ 15,645.
c. $ 16,027. 
d. $ 16,058.

32. Look at the Form 540 you prepared for John Soler. What is the amount on Form 540, Line 62?

a. $ 430.
b. $ 28.
c. $ 20. 
d. $ -0-.

33. 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). Then Complete Schedule CA (Form 540) part II, line 38 through line 44.

True False

34. For tax years beginning in 2004 and 2005, the _________________ allows taxpayers to elect to claim either local general sales and use taxes or state and local income taxes as an itemize deduction (CA 540/540 booklet).

a. American Employment act of 2004.
b. Economy Boost Act of 2008.
c. American Jobs Creation act of 2004.
d. None of the above.

35. Enter on line 39 of Schedule CA (Form 540) state and local income tax, state disability insurance (SDI) or Voluntary Plan disability Insurance (VPDI).

True False

36. FTB allows taxpayers to elect to claim either local general sales and use taxes or state and local income taxes as an itemized deduction.

True False

37. FTB allows a deduction for foreign income taxes as an itemized deduction amount.

True False

38. If you did not itemize deductions on your federal tax return, you cannot itemize deductions for California.

True False

39. Federal estate tax paid on income in respect of decedent is not deductible for California.

True False

40. Tax paid on generation skipping transfers is deductible under California law.

True False