FL Tax Law Specialist Practice Questions - Florida Bar Board Certified - Tax Law Exam - FL Tax Law Specialist Practice Questions - Florida Bar Board Certified

Question 1

A single, cash-method taxpayer receives a $5,000 bonus check from her employer on December 30, 2025, but deposits it on January 3, 2026. Under the federal income tax doctrine that governs cash-method taxpayers, in which year is the $5,000 includible in gross income?

2025, because the check was set apart and available to her without substantial restriction 2026, because that is when the funds were deposited and cleared Either year, at the taxpayer's election under IRC 451 Neither year until the employer reports it on a Form W-2

Correct Answer:

2025, because the check was set apart and available to her without substantial restriction

Question 2

A taxpayer's home is destroyed by a hurricane in a federally declared disaster area, and his insurance reimbursement exceeds his adjusted basis in the property. Which Internal Revenue Code provision allows him to elect to defer recognition of the realized gain if he reinvests the proceeds in qualifying replacement property within the statutory period?

IRC 1031 (like-kind exchange) IRC 1033 (involuntary conversions) IRC 121 (sale of principal residence exclusion) IRC 1041 (transfers incident to divorce)

Correct Answer:

IRC 1033 (involuntary conversions)

Question 3

Which of the following items is excluded from a recipient's gross income under the Internal Revenue Code?

Punitive damages received in a personal physical injury lawsuit Interest received on a state income tax refund Compensatory damages received on account of personal physical injuries or physical sickness Severance pay received upon termination of employment

Correct Answer:

Compensatory damages received on account of personal physical injuries or physical sickness

Question 4

An individual taxpayer has $40,000 of net long-term capital gain from selling stock held three years and a $10,000 net short-term capital loss in the same year. How are these netted for federal income tax purposes?

The short-term loss first offsets ordinary income up to $3,000, then the remainder offsets the long-term gain The long-term gain is taxed at ordinary rates because a short-term loss converts it to ordinary income The two amounts are reported separately and cannot be netted against each other The short-term loss is netted against the long-term gain, leaving $30,000 of net capital gain taxed at preferential rates

Correct Answer:

The short-term loss is netted against the long-term gain, leaving $30,000 of net capital gain taxed at preferential rates

Question 5

A married couple sells their principal residence, which they owned and used as their main home for the last four years, realizing a $400,000 gain. Assuming they file jointly and meet the ownership-and-use test, what is the maximum gain they may exclude under IRC 121?

$$500,000 $$250,000 $$400,000 in full only if they reinvest in a new home $$0, because the residence-rollover provision was repealed

Correct Answer:

$$500,000

Question 1

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Prepare with the FL Tax Law Specialist Practice Questions - Florida Bar Board Certified - Tax Law Exam practice quiz. This question bank includes 100 questions covering income, federal, taxpayer, estate, and corporation. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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FL Tax Law Specialist Practice Questions - Florida Bar Board Certified - Tax Law Exam

This practice set contains 100 questions from the matching question bank and focuses on income, federal, taxpayer, estate, and corporation. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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FL Tax Law Specialist Practice Questions - Florida Bar Board Certified - Tax Law Exam

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