July/August 2018 LACBA MCLE Test and Answer Sheet

 

Test No. 280: Tax Cuts and Jobs Act of 2017 

To access the article related to this test, please click here. The article will open in a separate window.
  
Instructions for Obtaining MCLE Credit

The Los Angeles County Bar Association certifies that this activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour. To apply for credit, please follow the instructions.

1. Study the CLE article.

2. Answer the test questions by marking the appropriate boxes. Each question has only one answer.

3. Photocopies of this answer sheet may be submitted; however, this form should not be enlarged or reduced. Mail the answer sheet and the $25 testing fee ($35 for non-LACBA members) to:

Los Angeles County Bar Association
Attn: Los Angeles Lawyer MCLE Test
P.O. Box 55020
Los Angeles, CA 90055

Make checks payable to Los Angeles County Bar Association.

4. You can also fill in the test form and submit it directly to LACBA by clicking "Submit." To submit your test answers online you will need to pay by credit card. After submitting your answers you will be presented with a screen requesting payment information. This information will be submitted in a secure mode which will allow you to safely transmit your credit card number over the Internet. If you prefer not to pay by credit card, please print this answer sheet and submit your responses by regular mail.

5. Within six weeks, Los Angeles Lawyer will return your test with the correct answers, a rationale for the correct answers, and a certificate verifying the CLE credit you earned through this self-study activity.

6. For future reference, please retain the CLE test materials returned to you.


 

Test Sheet
 



  
Mark your answers to the test by clicking next to your choice.  All questions must be answered.  Each question has only one answer. This test is worth 1 hour of credit.*

1. The Tax Cuts and Jobs Act of 2017 (TCJA) passed Congress on a bipartisan basis.


2. Most provisions in the TCJA that affect individuals are permanent changes.


3. Effective January 1, 2018, the highest federal individual income tax rate is 37 percent.


4. The TCJA repealed the net investment income tax of 3.8 percent.


5. Under the TCJA, individuals may still deduct state and local income taxes in excess of $10,000 so long as such taxes are attributable to their trade or business.


6. Effective for 2018, the estate and gift tax exclusion amount is $10 million per person before adjusting for inflation, which increases the exclusion amount to approximately $11.2 million per person.


7. Beginning in 2018, the federal income tax rate for domestic subchapter C corporations is 21 percent.


8. Beginning in 2018, only the corporate alternative minimum tax has been repealed.


9. The new qualified business income deduction under Section 199A of the Internal Revenue Code is generally up to 20 percent of qualified business income from pass-through entities other than most professional and investment service providers with high levels of income.


10.Manufacturers with average annual gross receipts of $25 million or less for the prior three years may now use the cash method of accounting.


11. Domestic businesses can expense 100 percent of the cost of eligible property placed in service from September 27, 2017, through December 31, 2022.


12. Beginning in 2018, the deduction for investment interest expense will generally be limited to 30 percent of a taxpayer’s adjusted taxable income.


13. The limitation on the deduction for business interest expense does not apply to an electing real property trade or business.


14. The TCJA limits the deduction for net operating losses to 70 percent of taxable income before net operating losses.


15. Beginning in 2018, active excess business losses for noncorporate taxpayers will now be limited to the extent they exceed $500,000 on joint returns and $250,000 on single returns.


16. The TCJA did not modify the existing rules with respect to “like-kind” exchanges of property under IRC Section 1031.


17. The TCJA generally denies a deduction for amounts paid at the direction of a government or governmental entity in relation to the violation of any law or the investigation or inquiry by the government or entity into the potential violation of any law.


18. The TCJA’s provisions comprise a modified territorial system of taxation of foreign earnings as not all foreign income is exempt.


19. The tax for the transition to the modified territorial system of taxation is generally payable over 8 years by 10 percent or greater U.S. corporate and individual shareholders of most foreign corporations with such shareholders.


20. Under the TCJA, domestic C corporations may be taxed at a federal rate as low as 13.125 percent on foreign- derived intangible income from serving foreign markets.

 


Before clicking the Submit button, please verify that all questions have been answered. An error message will appear if not all questions are answered.

* The Los Angeles County Bar Association has been approved as a continuing legal education provider of Minimum Continuing Legal Education credit by the State Bar of California. This self-assessment activity will qualify for Minimum Continuing Legal Education credit by the State Bar of California in the amount of one hour.