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1. One possible disadvantage to high income taxpayers who take advantage of preferential deductions, resulting...

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Accounting

1. One possible disadvantage to high income taxpayers who take advantage of preferential deductions, resulting in the payment of little or no tax is:

  • A. Loss of exemptions for children
  • B. Income to fund goals like home ownership
  • C. Annual IRS audits
  • D. The alternative minimum tax

2. Alex is 30 years old and has a Roth IRA with a current value of $40,000. He began contributing $5,000 annually to the account five years ago. Which of the following is correct?

  • A. Alex could withdraw $40,000 tax-free for his MBA tuition.
  • B. Alex can make no withdrawals without an income tax or penalty prior to age 59.
  • C. Alex could withdraw $30,000 tax-free to purchase a new bass boat.
  • D. Alex could withdraw $10,000 to purchase his first house without a tax penalty or income taxes.

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