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SEE Part 1

SEE Part 1 practice questions and answers

12 questions across every section of the exam. Each answer explains the rule and quotes the IRS source behind it.

Want to know where you stand first? Answer them one at a time and get a score for each section.

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  1. Preliminary Work and Taxpayer DataQuestion 1

    Lena is single and was 40 years old at the end of 2025. Her 2025 gross income was $16,000 in wages. She had no net earnings from self-employment, and none of the other special situations that require a return applied to her. What is the gross-income filing threshold for Lena for 2025 — the least gross income that required her to file a return?

    1. $31,500
    2. $15,750
    3. $23,625
    4. $17,750
    Show answer
    • $31,500$31,500 is the filing threshold for married filing jointly where both spouses were under 65 at the end of 2025.
    • $15,750A single filer who was under 65 at the end of 2025 must file a return when gross income was at least $15,750.
    • $23,625$23,625 is the filing threshold for a head of household filer who was under 65 at the end of 2025.
    • $17,750$17,750 is the filing threshold for a single filer who was 65 or older at the end of 2025.

    Read the filing-requirements chart by status and age. Lena's threshold as a single filer under 65 is $15,750, and her $16,000 in wages meets it.

    Publication 501 — Dependents, Standard Deduction, and Filing Information Page 2

    Table 1. 2025 Filing Requirements Chart for Most Taxpayers THEN file a return if your gross income was at least...** IF your filing status is... AND at the end of 2025 you were...* single under 65 $15,750 65 or older $17,750 head of household under 65 $23,625 65 or older $25,625 married filing jointly*** under 65 (both spouses) $31,500
    View on the source

    Taught in Whether, When, and How to File

  2. Preliminary Work and Taxpayer DataQuestion 2

    Dan is 25, unmarried, and a U.S. citizen. He lived with his brother Tom all year as a member of Tom's household. Tom provided more than half of Dan's total support for the year. Dan is not a qualifying child of Tom or of any other taxpayer, and Dan filed no joint return. Dan's gross income for the year was $4,800. Which of the following is correct regarding Tom claiming Dan as a qualifying relative?

    1. Tom cannot claim Dan; Dan fails the gross-income test.
    2. Tom can claim Dan as a qualifying relative.
    3. Tom cannot claim Dan; Dan fails the support test.
    4. Tom cannot claim Dan; Dan fails the age test.
    Show answer
    • Tom cannot claim Dan; Dan fails the gross-income test.A qualifying relative's gross income for the year must be less than $5,200. An amount below that limit meets the gross-income test.
    • Tom can claim Dan as a qualifying relative.A qualifying relative has no age limit. Living with the taxpayer all year as a household member meets the relationship-or-household test. Gross income of less than $5,200 meets the gross-income test. Taxpayer support of more than half meets the support test. Being no one's qualifying child leaves the qualifying-relative path open.
    • Tom cannot claim Dan; Dan fails the support test.For a qualifying relative, the taxpayer must provide more than half of the person's total support. The rule that a child must not provide more than half of their own support belongs to the qualifying-child tests.
    • Tom cannot claim Dan; Dan fails the age test.Age limits are part of the qualifying-child tests. The qualifying-relative tests have no age test.

    A qualifying relative must be no one's qualifying child, meet the relationship-or-all-year-household test, have gross income under $5,200, and receive over half of their support from you. There is no age test on this path.

    Publication 501 — Dependents, Standard Deduction, and Filing Information Page 19

    To meet this test, a person’s gross income for the year must be less than $5,200.
    View on the source

    Taught in Counting Dependents

  3. Income and AssetsQuestion 3

    Ruth bought shares in a taxable mutual fund 4 months ago. The fund sends her a $400 distribution shown on Form 1099-DIV, box 2a as a capital gain distribution. How is the $400 classified?

    1. Report the $400 as ordinary dividend income.
    2. Report the $400 as a short-term capital gain.
    3. Exclude the $400 as a nontaxable return of capital that only reduces basis.
    4. Report the $400 as a long-term capital gain.
    Show answer
    • Report the $400 as ordinary dividend income.Ordinary dividends are distributions paid out of earnings and profits, while a box 2a amount is a capital gain distribution. The $400 is not ordinary dividend income.
    • Report the $400 as a short-term capital gain.A short holding period does not make a capital gain distribution short term. A box 2a distribution from a mutual fund is a long-term capital gain regardless of how long the shares were held.
    • Exclude the $400 as a nontaxable return of capital that only reduces basis.A return of capital is a nondividend distribution shown in box 3 that reduces stock basis and is not taxed until basis is recovered. A box 2a capital gain distribution is taxable and is not a basis-only adjustment.
    • Report the $400 as a long-term capital gain.A capital gain distribution from a mutual fund is a long-term capital gain even when the shareholder has owned the shares for only a short time. Ruth's 4-month holding period does not change the $400 box 2a distribution.

    A capital gain distribution from a mutual fund is a long-term capital gain, regardless of how long the shares were held.

    Publication 550 — Investment Income and Expenses Page 30

    Report capital gain distributions as long-term capital gains, regardless of how long you owned your shares in the mutual fund or REIT.
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    Taught in Pay, Interest, and Dividends

  4. Income and AssetsQuestion 4

    In 2025, Dana sold corporate bonds she held as investment property. After combining all of her and her husband's capital gains and losses for the year, they have a net capital loss of $8,200 and no other capital transactions. They file a joint return, and their taxable income before this deduction is well above zero. How much of the loss can they deduct for 2025, and what happens to the rest?

    1. Deduct the full $8,200 on the 2025 joint return, with nothing carried over.
    2. Deduct $1,500 on the 2025 joint return and carry over $6,700 to 2026.
    3. Deduct $3,000 on the 2025 joint return and carry over $5,200 to 2026.
    4. Deduct $3,000 on the 2025 joint return, with the unused $5,200 permanently lost.
    Show answer
    • Deduct the full $8,200 on the 2025 joint return, with nothing carried over.An individual filing jointly can deduct up to $3,000 of net capital loss for the year, so deducting the entire $8,200 for 2025 exceeds the yearly amount allowed.
    • Deduct $1,500 on the 2025 joint return and carry over $6,700 to 2026.The $1,500 yearly limit applies when a married person files a separate return; on a joint return the limit is $3,000.
    • Deduct $3,000 on the 2025 joint return and carry over $5,200 to 2026.The yearly deduction for a net capital loss on a joint return is $3,000, and a net loss above that yearly limit carries over to the next year. Here $8,200 minus $3,000 leaves $5,200 to carry to 2026.
    • Deduct $3,000 on the 2025 joint return, with the unused $5,200 permanently lost.The yearly limit sets how much is deductible for 2025; a net loss above that limit carries to the next year instead of being permanently disallowed.

    The yearly capital loss deduction limit on a joint return is $3,000, so they deduct $3,000 for 2025 and carry the remaining $5,200 ($8,200 - $3,000) to 2026.

    Publication 544 — Sales and Other Dispositions of Assets Page 55

    The yearly limit on the amount of the capital loss an individual can deduct is $3,000 ($1,500 if you are married and file a separate return). Capital loss carryover. Generally, you have a capital loss carryover if either of the following situations applies to you. • Your net loss is more than the yearly limit.
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    Taught in Gains, Losses, and Netting

  5. Deductions and CreditsQuestion 5

    Priya files as head of household and has adjusted gross income (AGI) of $48,000 for the year. During the year she paid $4,600 for qualifying dental treatment and $2,800 for qualifying prescription eyeglasses, none of it reimbursed. She itemizes deductions and claims the medical expense deduction on Schedule A (Form 1040). What is her medical expense deduction?

    1. $7,400
    2. $2,600
    3. $555
    4. $3,800
    Show answer
    • $7,400The full $7,400 is not deductible. Expenses up to 7.5% of AGI ($3,600) do not count, so only the $3,800 above that level is deductible.
    • $2,600A 10% floor does not apply here. The floor is 7.5% of AGI, which is $3,600, so the deductible amount is $7,400 minus $3,600, not minus $4,800.
    • $5557.5% applies to the $48,000 AGI, not to the $7,400 of expenses. The floor is $3,600, and $7,400 minus $3,600 is $3,800.
    • $3,800Only the part of qualifying expenses above 7.5% of AGI is deductible. 7.5% of $48,000 is $3,600, and $7,400 minus $3,600 is $3,800.

    Multiply AGI by 7.5% ($48,000 x 0.075 = $3,600) and deduct only expenses above that floor: $7,400 - $3,600 = $3,800.

    Publication 502 — Medical and Dental Expenses Page 1

    You can deduct on Schedule A (Form 1040) only the part of your medical and dental expenses that is more than 7.5% of your adjusted gross income (AGI).
    View on the source

    Taught in Medical Costs, Taxes, and Mortgage Interest

  6. Deductions and CreditsQuestion 6

    Diane files head of household for 2025 with modified AGI of $150,000. She claims her daughter Chloe as a dependent on the return. Chloe is a U.S. citizen who lived with Diane all of 2025, did not provide over half of her own support, and did not file a joint return. Chloe turned 17 on December 30, 2025, and has a social security number valid for employment issued before the return's due date. Which of the following is correct regarding the 2025 child tax credit (CTC) and credit for other dependents (ODC) for Chloe?

    1. Diane may claim no CTC for Chloe and no ODC for Chloe.
    2. Diane may claim no CTC for Chloe and a $500 ODC for Chloe.
    3. Diane may claim a $2,200 CTC for Chloe and no ODC for Chloe.
    4. Diane may claim a $2,200 CTC for Chloe and a $500 ODC for Chloe.
    Show answer
    • Diane may claim no CTC for Chloe and no ODC for Chloe.Chloe's 17th birthday rules out the CTC, but a 17-year-old who is claimed as a dependent, is a U.S. citizen, and has a timely SSN can still fit the $500 other-dependent credit, so Diane is not left with nothing on these facts.
    • Diane may claim no CTC for Chloe and a $500 ODC for Chloe.Chloe turned 17 before the end of 2025, so there is no CTC for her. The $500 credit for other dependents is the one that fits instead: Chloe is claimed as a dependent, is a U.S. citizen, cannot be used for the CTC, and has an employment-valid SSN issued before the return's due date. With modified AGI of $150,000, Diane is below the $200,000 level for head of household, so the amount is not reduced.
    • Diane may claim a $2,200 CTC for Chloe and no ODC for Chloe.Chloe turned 17 on December 30, 2025, so she was 17 at the end of 2025 and misses the under-17 cutoff — the $2,200 CTC is not available for her.
    • Diane may claim a $2,200 CTC for Chloe and a $500 ODC for Chloe.Chloe's age rules out the CTC, and one child cannot produce both a CTC and the $500 other-dependent credit, so claiming both credits for Chloe is not allowed.

    Chloe was 17 at the end of 2025 and therefore fails the under-17 condition for the CTC, but as Diane's claimed dependent, a U.S. citizen with a timely SSN who cannot be used for the CTC, she may qualify Diane for the ODC of up to $500. Diane's $150,000 modified AGI is below the $200,000 level for her filing status, so the credit is not reduced.

    Publication 17 — Your Federal Income Tax Page 111

    Example. Your child turned 17 on December 30, 2025, and is a citizen of the United States and claimed as a dependent on your return. You can't use the child to claim the CTC or ACTC because the child was not under age 17 at the end of 2025.
    View on the source

    Taught in Child Care and Child Credits

  7. Deductions and CreditsQuestion 7

    Paula claimed the earned income credit, a tax credit for certain people who work, for 2023. There was a final determination that her 2023 claim was due to reckless disregard of the credit rules, not fraud. She meets all requirements for the credit in later years. When may she next claim the earned income credit?

    1. Paula may claim the credit for 2034.
    2. Paula may claim the credit for 2026.
    3. Paula may never claim the credit again.
    4. Paula may claim the credit for 2024.
    Show answer
    • Paula may claim the credit for 2034.The ten-year bar applies to fraud, and this determination was for reckless disregard rather than fraud.
    • Paula may claim the credit for 2026.A reckless-disregard determination blocks the credit for the next two years, so after a 2023 determination the bar covers 2024 and 2025 and ends before 2026.
    • Paula may never claim the credit again.A reckless-disregard bar lasts two years; it does not permanently end eligibility.
    • Paula may claim the credit for 2024.A reckless-disregard determination blocks the credit for the next two years, so the year immediately after the determination year is still barred.

    A reckless-disregard determination bars the earned income credit for the next two years; fraud draws a ten-year bar.

    Form 1040 Instructions Page 43

    Also, don’t file Form 8862 or take the credit for the: • 2 years after the most recent tax year for which there was a final determination that your EIC claim was due to reckless or intentional disregard of the EIC rules, or • 10 years after the most recent tax year for which there was a final determination that your EIC claim was due to fraud.
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    Taught in Earned Income and Adoption Credits

  8. TaxationQuestion 8

    Owen files as single for 2025 and completes Form 6251, Alternative Minimum Tax — Individuals. His taxable excess (the amount on Form 6251, line 6) is $300,000. For 2025 the tentative minimum tax is figured with a 26% rate and a 28% rate. How is the 26% rate applied to his $300,000?

    1. The first $119,550 at 26%
    2. The first $239,100 at 26%
    3. The full $300,000 at 28%
    4. The full $300,000 at 26%
    Show answer
    • The first $119,550 at 26%For a single filer, the 26% slice is the first $239,100 of taxable excess. $119,550 is the 26% limit for married filing separately.
    • The first $239,100 at 26%For a single filer, the 26% rate applies to the first $239,100 of taxable excess. $300,000 minus $239,100 leaves $60,900, which is figured at 28%.
    • The full $300,000 at 28%For a single filer, the first $239,100 of taxable excess is still figured at 26%. The 28% rate does not replace that 26% slice.
    • The full $300,000 at 26%For a single filer, the 26% rate covers only the first $239,100 of taxable excess. The amount above that level is figured at 28%.

    For a 2025 single filer, the 26% rate applies to the first $239,100 of taxable excess, so Owen applies 26% to $239,100 and 28% to the remaining $60,900.

    Instructions for Form 6251, Alternative Minimum Tax — Individuals Page 1

    the 26% tax rate applies to the first $239,100 ($119,550 if married filing separately) of taxable excess (the amount on line 6).
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    Taught in The Alternative Minimum Tax

  9. TaxationQuestion 9

    Maya worked as an employee in 2025 — not as an independent contractor. Her employer paid her $5,000 in wages but did not withhold social security and Medicare taxes from that pay. Which of the following is correct regarding Maya's 2025 federal individual income tax return?

    1. Include the $5,000 on Form 1040 line 1a with no additional form
    2. Exclude the $5,000 from income and file no form for it
    3. Report the $5,000 on Schedule C as self-employment income
    4. Include the $5,000 on Form 1040 line 1g and file Form 8919
    Show answer
    • Include the $5,000 on Form 1040 line 1a with no additional formWages paid to an employee without social security and Medicare withholding are included on Form 1040 line 1g with Form 8919 for the uncollected tax. Reporting them on line 1a with no additional form leaves that tax unreported.
    • Exclude the $5,000 from income and file no form for itPay for services performed is income whether or not the employer withheld tax from it. The $5,000 is still wages for work Maya did, so it must be reported.
    • Report the $5,000 on Schedule C as self-employment incomeWhether pay is reported on Schedule C turns on whether the services were performed as an independent contractor. Maya worked as an employee, so the $5,000 remains employee wages, and the lack of withholding does not reclassify it as self-employment income.
    • Include the $5,000 on Form 1040 line 1g and file Form 8919Wages for services performed other than as an independent contractor, where the employer did not withhold social security and Medicare taxes, are included on Form 1040 line 1g, and Form 8919 reports the uncollected tax.

    Employee wages paid without social security and Medicare withholding are still income: include them on Form 1040 line 1g and file Form 8919 for the uncollected tax.

    Publication 525 — Taxable and Nontaxable Income Page 3

    If you performed services, other than as an independent contractor, and your employer didn’t withhold social security and Medicare taxes from your pay, you must file Form 8919, Uncollected Social Security and Medicare Tax on Wages, with your Form 1040 or 1040-SR. These wages must be included on Form 1040 or 1040-SR, line 1g.
    View on the source

    Taught in Self-Employment and Household Taxes

  10. Advising the Individual TaxpayerQuestion 10

    Maria timely filed her 2023 Form 1040 on April 15, 2024, and paid the tax shown on that date. In November 2026 she discovers she missed a deduction that would reduce her 2023 tax and produce a refund. No extension, disaster postponement, bad debt, or other special situation applies. Which statement about claiming the refund is correct?

    1. File Form 843 for 2023 by April 15, 2027
    2. File a second Form 1040 for 2023 by April 15, 2027
    3. File Form 1040-X by April 15, 2027
    4. File Form 1040-X by April 15, 2031
    Show answer
    • File Form 843 for 2023 by April 15, 2027Form 843 claims a refund or abatement of penalties, interest, or additions to tax. It does not correct income or deductions on a filed return; that correction is made on Form 1040-X.
    • File a second Form 1040 for 2023 by April 15, 2027Once an original return has been filed, a change to it is made on Form 1040-X. Filing another original return does not correct the filed return and can delay the refund.
    • File Form 1040-X by April 15, 2027A filed return that needs a tax change is corrected on Form 1040-X. A refund claim is timely if filed within 3 years after the original return was filed or within 2 years after the tax was paid, whichever date is later. Counting three years forward from the April 15, 2024 filing and payment reaches April 15, 2027.
    • File Form 1040-X by April 15, 2031The 7-year period covers a refund claim based on a bad debt or a worthless security. A missed deduction follows the general period of 3 years after filing or 2 years after payment, with the later of the two dates controlling.

    Maria corrects her filed 2023 return with Form 1040-X. A refund claim is timely if filed within 3 years after the original return was filed or within 2 years after the tax was paid, whichever is later. Three years after the April 15, 2024 filing and payment is April 15, 2027, so Maria must file Form 1040-X by April 15, 2027.

    Form 1040-X Instructions Page 3

    Generally, for a credit or refund, you must file Form 1040-X within 3 years (including extensions) after the date you filed your original return or within 2 years after the date you paid the tax, whichever is later.
    View on the source

    Taught in Reporting and Fixing the Return

  11. Advising the Individual TaxpayerQuestion 11

    Alex and Jordan filed a joint return that showed an overpayment. The overpayment was applied to Jordan's past-due student loan. Alex is not legally obligated to pay that loan. Alex worked during the year, had federal income tax withheld from wages, and reported that withholding on the joint return. Which outcome fits these facts?

    1. No part of the overpayment is returned to Alex
    2. Jordan gets back Jordan's share of the overpayment
    3. Alex gets back Alex's share of the joint overpayment
    4. Alex gets back the entire joint overpayment
    Show answer
    • No part of the overpayment is returned to AlexFiling a joint return does not block recovery; the spouse who is not obligated on the debt and who made and reported tax payments still recovers that spouse's own share.
    • Jordan gets back Jordan's share of the overpaymentThe recovery belongs to the spouse who is not obligated on the past-due loan; the spouse whose debt caused the offset does not recover as the injured spouse.
    • Alex gets back Alex's share of the joint overpaymentA spouse whose share of a joint overpayment was applied to the other spouse's past-due student loan, who is not obligated on that loan, and who made and reported tax payments such as withholding, recovers that spouse's own share of the overpayment.
    • Alex gets back the entire joint overpaymentRecovery is limited to the injured spouse's own share, so the portion belonging to the spouse who owes the past-due loan stays applied to that loan.

    A joint overpayment applied to Jordan's past-due student loan leaves Alex, who is not obligated on the loan and who made and reported withholding, able to recover only Alex's own share; the rest stays applied, and the debtor spouse does not recover.

    Publication 971 — Innocent Spouse Relief Page 17

    When a joint return is filed and the refund is used to pay one spouse's past-due federal tax, state income tax, state unemployment compensation debts, child support, spousal support, or federal nontax debt, such as a student loan, the other spouse may be considered an injured spouse. The injured spouse can get back his or her share of the joint overpayment using Form 8379, Injured Spouse Allocation. You are considered an injured spouse if: 1. You are not legally obligated to pay the past-due amount, and 2. You meet any of the following conditions. a. You made and reported tax payments (such as federal income tax withholding or estimated tax payments).
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    Taught in When Spouses Need Relief

  12. Specialized Returns for IndividualsQuestion 12

    Eli and Vera, who are not married to each other, hold shares of stock together in a joint brokerage account as joint tenants with right of survivorship. They funded the account's stock purchases with $90,000: Eli contributed $60,000 from his own funds and Vera contributed $30,000 from her own funds; neither one gave the other the money used for the purchases. Eli has now died and Vera survives him. At the date of Eli's death, the jointly held shares are worth $180,000. What amount of the shares' value is included in Eli's gross estate?

    1. $180,000
    2. $90,000
    3. $60,000
    4. $120,000
    Show answer
    • $180,000The full date-of-death value is included only when no contribution by the surviving co-owner can be shown. Here Vera's $30,000 contribution from her own funds is established, so the part proportionate to her contribution is excluded.
    • $90,000An equal split applies when the co-owners contributed equally or received the property by gift or inheritance without specified shares. Here the contributions were unequal and are known, so the inclusion follows the two-thirds share Eli furnished, not one half.
    • $60,000The amount included is measured from the property's value at the date of death, not the dollars originally paid. Eli's two-thirds share applies to the $180,000 value at death, which is $120,000, not his original $60,000 payment.
    • $120,000For jointly owned property of co-owners who are not spouses, the decedent's gross estate includes the same share of the date-of-death value as the share of the purchase price the decedent furnished. Eli furnished two-thirds of the price ($60,000 of $90,000), so two-thirds of the $180,000 date-of-death value is included.

    For joint property owned by co-owners who are not spouses, include the share of the date-of-death value proportionate to the consideration the decedent furnished: $60,000 / $90,000 = two-thirds, and two-thirds of $180,000 = $120,000.

    Instructions for Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return Page 32

    Full value of jointly owned property also does not have to be included in the gross estate if you can show that any part of the property was acquired with consideration originally belonging to the surviving joint tenant(s). In this case, you may exclude from the value of the property an amount proportionate to the consideration furnished by the other tenant(s).
    View on the source

    Taught in Counting the Estate

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