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AICPA CPA Regulation Sample Questions:
1. Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
Tom received $10,000, consisting of $5,000 each of principal and interest, when he redeemed a Series
EE savings bond in 1994. The bond was issued in his name in 1990 and the proceeds were used to pay
for Laura's college tuition. Tom had not elected to report the yearly increases in the value of the bond.
A) $25,000
B) $55,000
C) $0
D) $1,000
E) $900
F) $1,500
G) $50,000
H) $75,000
I) $1,250
J) $500
K) $3,000
L) $1,300
M) $2,000
N) $10,000
O) $2,500
2. Tom and Joan Moore, both CPAs, filed a joint 1994 federal income tax return showing $70,000 in taxable
income. During 1994, Tom's daughter Laura, age 16, resided with Tom. Laura had no income of her own
and was Tom's dependent.
Determine the amount of income or loss, if any that should be included on page one of the Moores' 1994
Form 1040.
The Moores received a stock dividend in 1994 from Ace Corp. They had the option to receive either cash
or Ace stock with a fair market value of $900 as of the date of distribution. The par value of the stock was
$ 500.
A) $25,000
B) $55,000
C) $0
D) $1,000
E) $900
F) $1,500
G) $50,000
H) $75,000
I) $1,250
J) $500
K) $3,000
L) $1,300
M) $2,000
N) $10,000
O) $2,500
3. Which of the following is subject to the Uniform Capitalization Rules of Code Sec. 263A?
A) Warehousing costs incurred by a manufacturing company with $12 million in annual gross receipts.
B) Research and experimental expenditures.
C) Mine development and exploration costs.
D) Editorial costs incurred by a freelance writer.
4. Freeman, a single individual, reported the following income in the current year:
Guaranteed payment from services rendered to a partnership $50,000
Ordinary income from a S corporation $20,000
What amount of Freeman's income is subject to self-employment tax?
A) $0
B) $50,000
C) $20,000
D) $70,000
5. Which of the following statements is the best definition of real property?
A) Real property is land and everything permanently attached to it.
B) Real property is only land.
C) Real property is all tangible property including land.
D) Real property is land and intangible property in realized form.
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: E | Question # 3 Answer: A | Question # 4 Answer: B | Question # 5 Answer: A |
By April
