About these questions
These five questions are original. We wrote them in the style of the IRS content outline, which uses four-option multiple choice and a single best answer. They are not real exam questions, and the real exam will word things differently. Five questions cannot cover all six domains, so Advising the Individual Taxpayer is not sampled here. Our practice sets cover it.
All five assume tax year 2025 and law as amended through December 31, 2025, which is what the IRS bulletin for the July 2026 to February 2027 window says to use. Facts like these change every year, so do not reuse the numbers for another year without checking.
How to use these
Try each question without notes, and pick an answer before you open the explanation. Then read the explanation even when you were right, because the reason the closest wrong option fails is where the learning is. Note any domain where you slipped and revisit it on the domains explained page.
Question 1 (Preliminary Work and Taxpayer Data)
Marcus is the noncustodial parent of his nine-year-old daughter. The child’s custodial parent signs a valid Form 8332, and Marcus attaches it to his 2025 return. Which of the following does the release NOT allow Marcus to claim?
- A. The child tax credit for his daughter
- B. The additional child tax credit for his daughter
- C. Head of household filing status based on his daughter
- D. His daughter as his dependent
Show the answer and explanation
Correct answer: C. A signed Form 8332 lets the noncustodial parent treat the child as a dependent and claim the child tax credit and the additional child tax credit. It does not pass along head of household filing status, the earned income credit, or the child and dependent care credit, and those stay with the custodial parent. The other three options are what the release does allow. Option B is the one people most often get wrong, because they assume the refundable portion stays with the custodial parent.
Question 2 (Income and Assets)
Elena bought 200 shares of a company for $6,000 total. The company later declared a nontaxable two-for-one stock split in the same class of stock, and Elena received no cash. What is her basis per share and her total basis immediately after the split?
- A. $15 per share, $6,000 total
- B. $30 per share, $12,000 total
- C. $15 per share, $12,000 total
- D. $30 per share, $6,000 total
Show the answer and explanation
Correct answer: A. A nontaxable split in the same class of stock does not change total basis. The $6,000 is simply spread over the new count of 400 shares, which gives $15 per share. Option D is the closest wrong answer: it keeps the right total but ignores that the share count doubled. Options B and C treat the split as if it added cost, but Elena paid nothing extra.
Question 3 (Deductions and Credits)
Marisol paid $5,200 in 2025 for after-school care so she could work. Her only child is 8. Her employer’s dependent care benefit program paid $1,500 of that cost, and the $1,500 was excluded from her wages. Marisol has enough earned income. What amount of expenses can she use to figure the child and dependent care credit?
- A. $5,200
- B. $3,700
- C. $1,500
- D. $3,000
Show the answer and explanation
Correct answer: C. The expenses that count for the credit are capped at $3,000 for one qualifying person. Dependent care benefits excluded from income reduce that cap dollar for dollar, so $3,000 minus $1,500 leaves $1,500. Option B is the closest wrong answer because it subtracts the benefit from what she spent, but the reduction applies to the cap, not to the actual spending. Option D ignores the exclusion, and option A ignores both the cap and the exclusion.
Question 4 (Taxation)
Dmitri’s father died in 2025 with $30,000 of commissions that he had earned but his employer had not yet paid. The right to the commissions was included in the father’s taxable estate, and federal estate tax was paid on it. Dmitri inherits that right and receives the $30,000 in 2025. Which statement is correct?
- A. He reports $30,000 as income and may deduct the estate tax attributable to it
- B. He excludes the $30,000 because the estate was already taxed on it
- C. He reports nothing because his basis equals the value at his father’s death
- D. He reports $30,000 as income and claims a credit for the estate tax paid
Show the answer and explanation
Correct answer: A. Unpaid commissions that the dead person had earned are income in respect of a decedent. The recipient reports them as income, and if estate tax applied to the same item, a deduction under section 691(c) reduces the double hit. Option D is the closest wrong answer, since it recognizes the relief but gets the form wrong: it is a deduction, not a credit. Income in respect of a decedent gets no basis step-up, so option C fails, and no exclusion exists for option B.
Question 5 (Specialized Returns for Individuals)
Wendell and his wife Ana are U.S. citizens who were married all of 2025. In 2025, Wendell gave his niece $30,000 in cash from his own account. Neither spouse made any other gift, and both agree to split gifts. Which statement is correct? The annual gift tax exclusion for 2025 is $19,000 per recipient.
- A. No taxable gift results and no gift tax return is required
- B. No taxable gift results, but a gift tax return is still required to elect splitting
- C. Wendell has a taxable gift of $11,000 because only he gave
- D. Each spouse has a taxable gift of $15,000
Show the answer and explanation
Correct answer: B. With gift splitting, each spouse is treated as giving half, which is $15,000 each. That is under the $19,000 annual exclusion, so nothing is taxable. Splitting is an election made on Form 709, though, so a return is needed even though no tax is due. Option A is the closest wrong answer because it is right about the tax and wrong about the filing. Option C is what happens without splitting. Option D mixes up the split amount with a taxable amount.
More guides for SEE-PART1
- SEE Part 1 Format, Scoring and Retakes
- SEE Part 1 Study Plan: 4 and 8 Weeks
- Is SEE Part 1 Hard? An Honest Look
- SEE Part 1 Prerequisites and Skills Check
- SEE Part 1 Renewal and Retakes Explained
- Is SEE Part 1 Worth It? An Honest Look
- SEE Part 1 Cheat Sheet: Key Facts to Review
- SEE Part 1 vs Part 2: Which First?
Next step
Go through the domains explained page for the topics you missed, then try more in our SEE Part 1 practice tests, which are full sets of original questions for tax year 2025.