Topic 8: California State Tax / California Tax, Part I Quiz

California property exchanged for out-of-state property in a Like Kind Exchange is handled in the following way: If an individual is a nonresident and exchange real or tangible property located within California for real or tangible property located outside California, the realized gain or loss will be sourced to California. Taxation will not occur until the gain or loss is recognized. This requires the individual to keep track of their deferred California sourced gains and losses to report them to California in the year they sell or otherwise dispose of the property received in the exchange. Using this tax rule, answer the following:
As a resident of Texas, an individual exchanged a condominium located in California for like-kind property located in Texas. They realized a gain of $15,000 on the exchange that was properly deferred under IRC section 1031. They then sold the Texas property in a non-deferred transaction and recognized a gain of $20,000. What is the California gain and is tax due to California?

Select one:
a. Because Texas does not have a state income tax, the $15,000 deferred gain is not taxed by California
b. The $15,000 deferred gain has a source in California and is therefore taxable in California, regardless of where the property owner now lives
c. Not enough information is given to make a determination
d. The California gain is $15,000 and is taxed by California but only if and when the property owner moves back to California
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California property exchanged for out-of-state property in a Like Kind Exchange is handled in the following way: If an individual is a nonresident and exchange real or tangible property located within California for real or tangible property located outside California, the realized gain or loss will be sourced to California. Taxation will not occur until the gain or loss is recognized. This requires the individual to keep track of their deferred California sourced gains and losses to report them to California in the year they sell or otherwise dispose of the property received in the exchange. Using this tax rule, answer the following:
As a resident of Texas, an individual exchanged a condominium located in California for like-kind property located in Texas. They realized a gain of $15,000 on the exchange that was properly deferred under IRC section 1031. They then sold the Texas property in a non-deferred transaction and recognized a gain of $20,000. What is the California gain and is tax due to California?

Select one:
a. Because Texas does not have a state income tax, the $15,000 deferred gain is not taxed by California
b. The $15,000 deferred gain has a source in California and is therefore taxable in California, regardless of where the property owner now lives
c. Not enough information is given to make a determination
d. The California gain is $15,000 and is taxed by California but only if and when the property owner moves back to California
b. The $15,000 deferred gain has a source in California and is therefore taxable in California, regardless of where the property owner now lives
Which of the following conditions must be met in order to not need to qualify to use the Head of Household filing status for 2020 for purposes of the Senior Head of Household Credit?
Select one:
a. The taxpayer was 65 years of age or older on December 31, 2020
b. Qualified as a head of household in 2018 or 2019 by providing a household for a qualifying individual who died during 2018 or 2019
c. Did not have adjusted gross income over $78,441 for 2020
d. All of the above are necessary to claim the credit without need to qualify
d. All of the above are necessary to claim the credit without need to qualify
For 2020, the maximum that may be claimed as a credit for child adoption costs is:
Select one:
a. $2,500 per minor child
b. $5,000 per family
c. $2,000 per minor child
d. $2,500 per minor child not to exceed $5,000 per family
a. $2,500 per minor child
Which of the following are key differences between the California Earned Income Tax Credit (EITC) and the federal version of the credit for the 2020 tax year?
Select one:
a. If the taxpayer was a nonresident, they must have earned income from working in California
b. Both the taxpayer's earned income and federal adjusted gross income (AGI) must be less than $56,844 to qualify for the federal credit, and less than $30,000 to qualify for the California credit.
c. California does not allow the credit for self-employment income.
d. A and B are correct
d. A and B are correct
For the 2021 tax year, the maximum effective tax rate for individuals is:
Select one:
a. 10.3%
b. 13.1%
c. 13.3%
d. 10.0%
b. 13.1%
For the 2020 tax year, the Alternative Minimum Tax (AMT) may apply to a taxpayer filing as Single if total income for 2020 is more than:
Select one:
a. $99,707
b. California does not have an AMT
c. $67,101
d. $74,780
d. $74,780
Joe Story reported California taxable income of $1,500,000 for the tax year. Will he owe a Mental Health Services Tax and if so, how much will he owe?
Select one:
a. $1,250
b. $5,000
c. $2,500
d. The tax kicks in for taxable income that exceeds $1,500,000, therefore no tax is owed
b. $5,000
The exemption credit for most California taxpayer's dependents for the 2020 tax year is:
Select one:
a. $383
b. $367
c. $122
d. $124
a. $383
For the 2020 tax year California exemption credits may be limited for individuals filing Married Joint/RDP if their federal AGI exceeds:
Select one:
a. $203,341
b. $305,016
c. $406,687
d. California exemption credits are not limited by the FTB
c. $406,687
For the 2020 tax year, which of the following taxpayers is required to file a California State Income Tax Return?
Select one:
a. A 26 year old single filer with no dependents with a California gross income of $11,065
b. A 66 year old single filer with one dependent with a California gross income of $45,500
c. A 45 year old Married Filing Joint/RDP taxpayer with two dependents, a 41 year old spouse and a California gross income of $32,036
d. A 59 year old Qualifying Widow with one dependent and a California gross income of $25,200.
b. A 66 year old single filer with one dependent with a California gross income of $45,500
For the 2020 tax year, which of the following taxpayers is not required to file a California State Income Tax Return? Select one: a. A 27 year old single filer with no dependents California adjusted gross income of $30,000 b. A 36 year old Head of Household filer with 3 dependents and a California adjusted gross income of $24,500 c. A 44 year old Married Filing Separate/RDP filer with no dependents and with California adjusted gross income of $50,500 (including RDP's income) d. A 49 year old Single filer with two dependents and a California adjusted gross income of $44,000.b. A 36 year old Head of Household filer with 3 dependents and a California adjusted gross income of $24,500For the 2021 tax year, which of the following is not a due date for the payment of California estimated taxes? Select one: a. June 15, 2021 b. September 15, 2021 c. December 18, 2021 d. January 18, 2022c. December 18, 2021Form FTB 3519, Payment Voucher for Automatic Extension for Individuals, is to be used for the 2020 tax year under which of the following circumstances? Select one: a. A taxpayer can file their 2020 return by April 15, 2021 and they owe tax for 2020 but are not able to pay it in full by April 15, 2021 b. A taxpayer cannot file their 2020 return by April 15, 2021 and they are expecting a refund c. A taxpayer cannot file their 2020 return by April 15, 2021 and they owe tax for the 2020 tax year which they will pay with the submission of FTB 3519 d. A taxpayer can file their 2020 return by January 31, 2021 and want to pay their tax due by credit cardc. A taxpayer cannot file their 2020 return by April 15, 2021 and they owe tax for the 2020 tax year which they will pay with the submission of FTB 3519What is the California Standard Deduction for a Married /RDP Filing Joint taxpayer for the 2020 tax year? Select one: a. $4,537 b. $4,401 c. $9,202 d. $4,601c. $9,202For the 2020 tax year (return filed in 2021), for California taxpayers, qualified charitable contributions: Select one: a. Are the same as the federal deduction b. Can be different than the federal deduction because it is limited to 50% of Federal Adjusted Gross Income c. Can be different than the federal deduction because it is limited to 25% of Federal Adjusted Gross Income d. None of the above applyb. Can be different than the federal deduction because it is limited to 50% of Federal Adjusted Gross IncomeInterest earned from U.S. Treasury bills, notes, and bonds is not taxed by California. If the taxpayer paid federal tax on this interest then the adjustment is taken on ______ by entering the amount of the interest on Line 8 Column B. Select one: a. Schedule CA (540) b. Form 540 (A) c. Schedule A d. Form 540CAa. Schedule CA (540)Registered Domestic Partners (RDPs) who file a California tax return as Married/RDP filing jointly and have no RDP adjustments between federal and California, combine their individual AGIs from their federal tax returns filed with the IRS. RDP adjustments that will need to be made on the California joint return include but are not limited to the following: Select one: a. Sale of a personal residence b. Investment interest c. Education loan interest d. All of the aboved. All of the aboveWhich of the following are requirements for determining a taxpayers eligibility for claiming the Joint Custody Head of Household credit? Select one: a. The taxpayer was unmarried at the end of the tax year, or if married/RDP, they lived apart from their spouse/RDP for all of the tax year and they used the married filing separate/RDP filing status b. The taxpayer provided more than one-half the household expenses for their home that also served as the main home of their child, step-child or grandchild for at least 146 days but not more than 219 days of the taxable year c. A custody agreement for the child has not yet been approved and nothing concerning the matter has been placed in writing d. Both A and B aboved. Both A and B aboveA taxpayer, who is a resident of California and paid rent on a property in California that served as their primary residence may qualify for the _______ Renter's Credit. Select one: a. Refundable b. Non-refundable c. Joint d. Excessb. Non-refundableIn order to claim the Child and Dependent Care Expenses Credit you must complete and attach form: Select one: a. FTB 3521 b. FTB 3505 c. FTB 3506 d. FTB 3501c. FTB 3506For the year in which an order of adoption is final, the taxpayer may claim a credit for 50% of the cost of adopting a child who is a _____ and in the custody of a California public agency or political subdivision. Select one: a. Foreign national b. Resident of North or South America c. U.S. Citizen d. All of the abovec. U.S. CitizenThere are a variety of tax credits that are available to California taxpayers. Which of the following is an available California credit? Select one: a. California Child and Dependent Care Expenses Credit b. California Earned Income Tax Credit c. California Renters Credit d. California Credit for Senior Head of Household e. All the Above are Correcte. All the Above are CorrectTom and Tina are married and file Married Joint on their Federal tax return. Tom was a resident of a non-community property state for the entire year and earned no income from California sources. Tina was a California resident for the entire year and worked in Los Angeles full time for a marketing firm. They would like to file a joint California return. Which form must they file to do this? Select one: a. Form 540 b. Form 3800 c. Form 540NR d. You can not file a Joint California return in this situationc. Form 540NRThe following schedule or form is completed in order to make adjustments to a taxpayer's federal adjusted gross income and to their federal itemized deductions in order to figure their California Itemized deductions. Select one: a. Schedule CA (540) b. Schedule P (540) c. Schedule K-1 d. Schedule D (CA)a. Schedule CA (540)For which of the following taxpayers can Form 540 2EZ be used? Select one: a. Albert who files as single, has an income of $25,430, is taking the standard deduction and a personal exemption, and is not eligible for any credits. He will have an adjustment from the student loan interest deduction and his payment is only California income tax withheld shown on Form W-2 b. Jenna, who files as head of household with an income of $80,890, and has two dependents, is taking a personal exemption and two dependent exemptions, and is itemizing her deductions. Her payment is only California income tax withheld shown on Form W-2 c. Robert and Samantha who are filing as married/Register Domestic Partner (RDP) filing jointly, have one dependent, an income of $150,670, are taking the standard deduction, and they are taking a personal exemption and one dependent exemption. Their payment is only California income tax withheld shown on Form W-2 d. All of the above can file using Form 540 2EZ e. Both B and C can file using Form 540 2EZc. Robert and Samantha who are filing as married/Register Domestic Partner (RDP) filing jointly, have one dependent, an income of $150,670, are taking the standard deduction, and they are taking a personal exemption and one dependent exemption. Their payment is only California income tax withheld shown on Form W-2As a nonresident or part-year resident of California, a taxpayer is subject to the same subtractions and additions to federal adjusted gross income as a resident. In addition to filing FTB Form 540NR, the following will also be completed to make the adjustments. Select one: a. Schedule CA (A) b. FTB Form A c. FTB Form CA d. Schedule CA (540NR)d. Schedule CA (540NR)In order to change one's domicile, a person must actually move to a new state and intend to remain there ________. Select one: a. Permanently or indefinitely b. For a minimum of 181 days c. For a definite amount of time d. Temporary or transitorya. Permanently or indefinitelyFactors to consider when determining whether or not you are a resident of the state of California may include: Select one: a. Where you are registered to vote b. Where your vehicles are registered c. Location of your principal residence d. All of the aboved. All of the aboveFor taxable years beginning on or after January 1, 1994, an absence from California under an employment-related contract, under the Safe Harbor Rule, for a period of at least ____ consecutive days may generally be considered an absence for other than a temporary or transitory purpose. Select one: a. 365 b. 546 c. 366 d. 180b. 546For California purposes, when discussing residence and domicile, which of the following statements is not true? Select one: a. Residence and domicile are not one and the same b. The word "domicile" has a legal definition separate from residence c. For tax purposes, an individual domiciled in another state will never be considered a resident of California d. An individual may be domiciled in California, but not be a California resident for tax purposesc. For tax purposes, an individual domiciled in another state will never be considered a resident of California