Tax School Home Page
Student Instructions:
Steps:
1. Read the reading Material to answer the questions on this page and also to complete the short quiz. Reading Material click here.
2. Submit Assignment Online Click Here. (Have your questions on this page filled out and ready to answer the questions online one by one).
3. Complete a short quiz on the reading material: Short Quiz online click here. You have 25 minutes to complete 15 questions for this quiz. You must study the reading material. You won't have time to look up questions in the reading material. If you don't pass, you can retry - Every time you try the questions will be different.
So just to recap: for every section or topic you will submit an Assignment (step 2) and a Short Quiz (step 3). Once these two items are submitted, a certificate will be issued to you.
Important: If you fail a topic you can try again until you pass. However, you cannot try again until 24 hours later. This will give you enough time to study and review the reading material.
Use California FTB Pub. 1034 to complete this topic.
Complete a Form 4684 for Walter Brubeck (609-03-0321). On August 30, 2009, a fire storm caused extensive property damage to Walter's home. He had originally purchased the home for $94,000. The purchase price was allocated between the land ($18,000) and the building ($76,000). Walter planted trees and ornamental shrubs on the grounds surrounding his home at a cost of $1,200. The fair market value immediately before the storm was $102,000 ($84,000 for building and $18,000 land); immediately afterwards the value was $74,000 ($56,000 for building and $18,000 for the land). The fair market value of the trees and shrubs immediately before the casualty was $2,000 and immediately afterwards; $100. Insurance of $15,000 is received to cover the total damage.
Complete Form 1040, Form 4684, Schedule A (or Schedule L) and California Form 540 (and Schedule CA if needed). You may also need Form 1040 Instructions. Complete the Forms and Schedules that give Walter the best tax benefit. You will also need to look up tax for California in tax table or use the tax calculator.
Walter and his girlfriend have been together for 1 year. They do not have any children and are not married. They lived together all of 2009. Her name is Wilma Thornton (SSN: 070-82-5991). Wilma did not work because she was a student for all of 2009. They plan to get married when Wilma graduates from school.
Use the following Form W-2 to complete the return. The income and address information is current.
1. Look at the Form 540 you prepared for Walter. What is the amount on Form 540, Line 18?
A. $14,181. B. $14,182. C. $13,700. D. $3,637.
2. Look at the Form 540 you prepared for Walter. What is the amount on Form 540, Line 115?
A. $217. B. $146. C. $145. D. $133.
3. When your property is lost or damaged due to an earthquake, fire, flood, or similar event that is sudden, unexpected, or unusual, it is considered a
A. Sudden event. B. Theft loss. C. Casualty loss. D. None of the above.
4. California law is generally the same as federal law for casualties and disaster lose deductions.
True False
5. What documentation must you attach to your California return to report your losses?
A. Schedule D-1. B. FTB 3805V. C. FTB 3805Q. D. Any of the above.
6. You may qualify to carry over excess disaster losses if subsequent California legislation identifies your disaster for the special carryover treatment. The disaster provisions of R&TC 17207 and 24347.5 allow disaster victims to carryover 100% of the excess loss for up to
A. 15 years. B. 10 years. C. 5 years. D. None of the above.
7. As an individual, you can calculate your disaster loss by reporting California amounts on IRS Form 4684, submitting this form with your California tax return. You will also need to attach
A. A statement with full details of your whereabouts during the disaster. B. A statement giving the date and location of the disaster (city and country). C. Both A and B above. D. None of the above.
8. Your disaster loss documentation must include certain Internal Revenue Service forms. You must also attach a clearly written statement to your loss documentation that includes
A. The date of the loss. B. The location of the disaster (city, country, and state). C. Your decision to deduct the loss in the tax year before the year the disaster occurred, if that is what you choose to do. D. All of the above.
9. If your returns are lost or damaged due to disaster, FTB will replace your California returns at a nominal cost.
10. Special tax rules apply to disaster losses. You can claim a disaster loss in the tax year the disaster occurred or in the tax year before the disaster occurred. The benefit to claiming your disaster loss in the prior year is that FTB can issue you a refund very quickly.
11. California automatically follows federal postponement periods as announced by the IRS. If the IRS postpones a tax deadline, the following taxpayers are eligible for postponement, except
A. Any individual whose main home is located in a covered disaster area. B. A spouse on a joint return with a taxpayer who is eligible for postponement. C. Any business whose principal place of business is located in a covered disaster area. D. None of the above.
12. You must also include Internal Revenue Service (IRS) forms in your disaster loss documentation, such as
A. A completed IRS Form 4684, Casualties and Thefts using California amounts, and any supporting IRS schedules that verify your deduction. B. A copy of your IRS Form 1040, or 1040X. C. A copy of your IRS Form 1120 or 1120X. D. Any of the above.
13. If you electronically file your disaster loss tax return, you will receive your refund within 7 days if you choose to have it deposited directly into a bank account or with 10 days by mail.
14. To qualify as a disaster loss for federal purposes, the President of the United States must declare the area in which the disaster occurred as a disaster area, eligible for federal assistance under the Robert T. Stafford Disaster Relief and Emergency Assistance Act. This does not include
A. A mayor disaster or emergency declaration under the Act. B. A pronouncement by the Governor declaring an area as a disaster or emergency area. C. President declared area in which the disaster occurred as a disaster area. D. None of the above.
15. If you have both disaster loss carryovers and net operating loss carryovers, you must use them in the order you incurred them.
16. You usually qualify for a casualty loss deduction for tax purposes when insurance or other reimbursements do not repay you for damage to your property. Your casualty loss becomes a disaster loss when
A. You sustain the loss in an area the President of the United States or the governor of California designates as a disaster area. B. You sustain the loss because of the declared disaster. C. Both A and B above. D. None of the above.
17. If you meet the qualifications to claim a disaster loss anywhere within the United States and have a California tax-filing requirement (resident or nonresident), the same disaster rules and postponement periods automatically apply to you.
18. For disaster losses incurred in prior tax years, you can deduct any excess loss that remains after the five-year period for up to
A. 5 years. B. 10 years. C. 15 years. D. 20 years.
19. Determine your business loss by using the smaller of the decrease in fair market value of your property due to the casualty or the adjusted basis of the property.
20. If you have already filed your return for the preceding year, you can claim a disaster loss against that year's income by filing
A. Form 540. B. Form 540-EZ. C. Form 540A. D. Form 540X.
