Sample Questions
Question 1
Easy
Which of the following tax-loss harvesting strategies would violate the wash sale rule?
Solution
D is correct.
The wash sale rule requires the replacement security to be purchased within 30 days before or after the loss sale. When a wash sale occurs, the disallowed loss is added to the basis of the replacement shares.
The wash sale rule requires the replacement security to be purchased within 30 days before or after the loss sale. When a wash sale occurs, the disallowed loss is added to the basis of the replacement shares.
Question 2
Medium
Which of the following best describes how OBBBA changed the SALT deduction?
Solution
B is correct.
OBBBA raised the SALT cap from the pre-existing TCJA to per return ( MFS), for tax years 2025 through 2029. For MAGI between and ( and MFS) the cap phases down by 30 cents per dollar of excess, with a floor of ( MFS) reached at MAGI.
OBBBA raised the SALT cap from the pre-existing TCJA to per return ( MFS), for tax years 2025 through 2029. For MAGI between and ( and MFS) the cap phases down by 30 cents per dollar of excess, with a floor of ( MFS) reached at MAGI.
Question 3
Hard
Which of the following features distinguishes a simple trust from a complex trust?
Solution
A is correct.
A simple trust receives a $300 personal exemption, while a complex trust receives only $100. A simple trust is defined by three requirements: (1) it must distribute all income currently, (2) it may not make charitable contributions, and (3) it may not distribute corpus. The higher exemption reflects its more limited scope of activity.
A simple trust receives a $300 personal exemption, while a complex trust receives only $100. A simple trust is defined by three requirements: (1) it must distribute all income currently, (2) it may not make charitable contributions, and (3) it may not distribute corpus. The higher exemption reflects its more limited scope of activity.
