Free IRS Enrolled Agent SEE Part 1 (Individuals) Income and Assets Practice Questions
Income and Assets on the IRS SEE Part 1 covers wages and other compensation, interest and dividend income, retirement distributions, Schedule C self-employment, capital gains and losses, basis tracking, the §121 home-sale exclusion, and rules for reporting foreign-source income.
Which of the following items held by an individual taxpayer is NOT a capital asset?
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Correct Answer: A
Solution
Almost everything an individual owns is a capital asset, including property held for personal use and property held for investment. The statutory exclusions include **inventory and other property held mainly for sale to customers**, so goods held for resale in the taxpayer's business are ordinary income property rather than capital assets. See IRC §1221(a)(1) and Pub 544, ch. 2.
Question 2
Medium
For 2025, which statement about the OBBBA no-tax-on-tips deduction is correct?
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Correct Answer: A
Solution
The tips deduction phases out once modified AGI exceeds $150,000 single / $300,000 MFJ. It is NOT an itemized deduction (it is claimed on Schedule 1-A whether or not the taxpayer itemizes), a married taxpayer must file jointly to claim it, and it is capped at $25,000 (a self-employed taxpayer is further limited to net income from the tipped trade, not unlimited).
Question 3
Hard
Under SECURE 2.0, what is the required beginning date age for traditional IRA distributions for a taxpayer who was born in 1960?
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Correct Answer: A
Solution
SECURE 2.0 (signed December 29, 2022) amended IRC §401(a)(9)(C) to set the required beginning date age at 73 for individuals reaching age 73 in 2023 through 2032 (born 1951 through 1959) and 75 for individuals born in 1960 or later. A taxpayer born in 1960 must begin RMDs by April 1 of the year after attaining age 75.
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