Question 1

A taxpayer can receive innocent spouse relief if

Accepted Answer

A) the understated tax is attributable to erroneous items of the other spouse. 
B) the innocent spouse did not know and had no reason to know that there was an understatement of tax. 
C) under the circumstances, it would be inequitable to hold the innocent spouse liable for the understated tax. 
D) All of the above conditions apply. 
A) the understated tax is attributable to erroneous items of the other spouse. 
B) the innocent spouse did not know and had no reason to know that there was an understatement of tax. 
C) under the circumstances, it would be inequitable to hold the innocent spouse liable for the understated tax. 
D) All of the above conditions apply.

Question 2

If a 13-year-old has earned income of $500 and unearned income of $2,500, all of the income can be reported on the parent's return.

Accepted Answer

A) True 
 B)False

Question 3

John supports Kevin, his cousin, who lived with him throughout 2014. John also supports three other individuals who do not live with him:   Assume that Donna, Melissa, Morris and Kevin each earn less than $3,950. How many personal and dependency exemptions may John claim?

Accepted Answer

A) 2 
B) 3 
C) 4 
D) 5 
A) 2 
B) 3 
C) 4 
D) 5

Question 4

The oldest age at which the "Kiddie Tax" could apply to a dependent child is

Accepted Answer

A) 17 
B) 18 
C) 20 
D) 23 
A) 17 
B) 18 
C) 20 
D) 23

Question 5

Frank, age 17, received $4,000 of dividends and $1,500 from a part-time job. Frank is a dependent of his parents who are in the 28% percent bracket. Frank's taxable income is

Accepted Answer

A) $0. 
B) $4,000. 
C) $4,500. 
D) $3,650. 
A) $0. 
B) $4,000. 
C) $4,500. 
D) $3,650.

Question 6

Which of the following dependent relatives does not have to live in the same household as the taxpayer who is claiming head of household filing status?

Accepted Answer

A) uncle 
B) brother 
C) father 
D) nephew 
A) uncle 
B) brother 
C) father 
D) nephew

Question 7

In 2014, Sam is single and rents an apartment for which he pays $800 per month and makes charitable contributions of $1,000. Sam's adjusted gross income is $47,000.
Required: Compute his taxable income. Show all calculations.

Accepted Answer

The answer of In 2014, Sam is single and rents...

Question 8

Steve and Jennifer are in the 33% tax bracket for ordinary income and the 15% bracket for capital gains. They have owned several blocks of stock for many years. They are considering the sale of two blocks of stock. The sale of one would produce a gain of $12,000 while the sale of the other would produce a loss of $18,000. For purposes of this problem, ignore personal exemptions, itemized deductions, phase-outs and additional investment taxes. They have no other gains and losses this year.
a. How much tax will they save if they sell the block of stock that produces a loss?
b. How much additional tax will they pay if they sell the block of stock that produces a gain?
c. What will be the impact on their taxes if they sell both blocks of stock?

Accepted Answer

a. $990. A net capital loss is limited t

Question 9

In order to qualify to file as surviving spouse, all of the following criteria must be met by the widow or widower except

Accepted Answer

A) he or she and the decedent must have shared the same household as of date of death. 
B) he or she must be a U.S. citizen or resident. 
C) he or she be qualified to file a joint return in the year of death. 
D) he or she must have at least one dependent child living at home the entire year and pay over half of the expenses of the home. 
A) he or she and the decedent must have shared the same household as of date of death. 
B) he or she must be a U.S. citizen or resident. 
C) he or she be qualified to file a joint return in the year of death. 
D) he or she must have at least one dependent child living at home the entire year and pay over half of the expenses of the home.

Question 10

In October 2013, Joy and Paul separated and have not lived with each other since, but they are still legally married. They do not file a joint return. Joy supports their children after the separation and pays the cost of maintaining their home. Joy's filing status in 2013 and 2014 is, respectively,

Accepted Answer

A) single for both years. 
B) head of household and single. 
C) married filing separately for both years. 
D) married filing separately and head of household. 
A) single for both years. 
B) head of household and single. 
C) married filing separately for both years. 
D) married filing separately and head of household.

Question 11

Rena and Ronald, a married couple, each earn a salary of $200,000. They will be required to pay additional payroll taxes in 2014 of

Accepted Answer

A) $0. 
B) $1,350. 
C) $1,800. 
D) $5,800. 
A) $0. 
B) $1,350. 
C) $1,800. 
D) $5,800.

Question 12

Ryan and Edith file a joint return showing $130,000 of AGI (with no exclusions under Secs. 911, 931, and 933). They have three dependent children ages 7, 9, and 13. What is the amount of their child credit?

Accepted Answer

A) $0 
B) $1,000 
C) $2,000 
D) $3,000 
A) $0 
B) $1,000 
C) $2,000 
D) $3,000

Question 13

On June 1, 2014, Ellen turned 65. Ellen has been a widow for five years and has no dependents. Her standard deduction is

Accepted Answer

A) $3,950. 
B) $6,200. 
C) $7,750. 
D) $12,400. 
A) $3,950. 
B) $6,200. 
C) $7,750. 
D) $12,400.

Question 14

Sally divorced her husband three years ago and has not remarried. Since the divorce she has maintained her home in which she and her now sixteen-year-old daughter reside. The daughter is a qualified child. Sally signed the dependency exemption over to her ex-spouse. What is Sally's filing status for the current year and how many exemptions may she claim?

Accepted Answer

A) single and one 
B) surviving spouse and one 
C) head of household and one 
D) head of household and two 
A) single and one 
B) surviving spouse and one 
C) head of household and one 
D) head of household and two

Question 15

Juanita's mother lives with her. Juanita purchased clothing for her mother costing $1,000 and provided her with a room that Juanita estimates she could have rented for $4,000. Juanita spent $5,000 on groceries she shared with her mother. Juanita also paid $700 for her mother's health insurance coverage. How much of these costs is considered support?

Accepted Answer

A) $5,000 
B) $7,500 
C) $10,000 
D) $10,700 
A) $5,000 
B) $7,500 
C) $10,000 
D) $10,700

Question 16

To qualify as an abandoned spouse, the taxpayer is not required to

Accepted Answer

A) be a U.S. citizen or resident. 
B) live apart from the spouse for the last six months of the year. 
C) pay more than half the cost of maintaining the home. 
D) have a son or daughter in the home for the entire year. 
A) be a U.S. citizen or resident. 
B) live apart from the spouse for the last six months of the year. 
C) pay more than half the cost of maintaining the home. 
D) have a son or daughter in the home for the entire year.

Question 17

Generally, itemized deductions are personal expenses specifically allowed by the tax law.

Accepted Answer

A) True 
 B)False

Question 18

Lila and Ted are married and have AGI of $332,000 in 2014. They had their first children this year, twins. Lila and Ted will be allowed a deduction for personal and dependency exemptions of

Accepted Answer

A) $7,900. 
B) $15,800. 
C) $12,324. 
D) $3,476. 
A) $7,900. 
B) $15,800. 
C) $12,324. 
D) $3,476.

Question 19

In 2011, Leo's wife died. Leo has two small children, ages 2 and 4, living at home whom he supports entirely. Leo does not remarry and is not claimed as a dependent on another's return during any of this period. In 2012, 2013, and 2014, Leo's most advantageous filing status is, respectively

Accepted Answer

A) single for all three years. 
B) head of household for all three years. 
C) surviving spouse, surviving spouse, head of household. 
D) surviving spouse, surviving spouse, single. 
A) single for all three years. 
B) head of household for all three years. 
C) surviving spouse, surviving spouse, head of household. 
D) surviving spouse, surviving spouse, single.

Question 20

Ben, age 67, and Karla, age 58, have two children who live with them and for whom they provide total support. Their daughter is 21 years old, blind, is not a full-time student and has no income. Her twin brother is 21 years old, has good sight, is a full-time student and has income of $4,500. Ben and Karla can claim how many personal and dependency exemptions on their tax return?

Accepted Answer

A) 2 
B) 3 
C) 4 
D) 5 
A) 2 
B) 3 
C) 4 
D) 5

A taxpayer can receive innocent spouse relief if

If a 13-year-old has earned income of $500 and unearned income of $2,500, all of the income can be reported on the parent's return.

John supports Kevin, his cousin, who lived with him throughout 2014. John also supports three other individuals who do not live with him: Assume that Donna, Melissa, Morris and Kevin each earn less than $3,950. How many personal and dependency exemptions may John claim?

The oldest age at which the "Kiddie Tax" could apply to a dependent child is

Frank, age 17, received $4,000 of dividends and $1,500 from a part-time job. Frank is a dependent of his parents who are in the 28% percent bracket. Frank's taxable income is

Which of the following dependent relatives does not have to live in the same household as the taxpayer who is claiming head of household filing status?

In 2014, Sam is single and rents an apartment for which he pays $800 per month and makes charitable contributions of $1,000. Sam's adjusted gross income is $47,000. Required: Compute his taxable income. Show all calculations.

In order to qualify to file as surviving spouse, all of the following criteria must be met by the widow or widower except

In October 2013, Joy and Paul separated and have not lived with each other since, but they are still legally married. They do not file a joint return. Joy supports their children after the separation and pays the cost of maintaining their home. Joy's filing status in 2013 and 2014 is, respectively,

Rena and Ronald, a married couple, each earn a salary of $200,000. They will be required to pay additional payroll taxes in 2014 of

Ryan and Edith file a joint return showing $130,000 of AGI (with no exclusions under Secs. 911, 931, and 933). They have three dependent children ages 7, 9, and 13. What is the amount of their child credit?

On June 1, 2014, Ellen turned 65. Ellen has been a widow for five years and has no dependents. Her standard deduction is

To qualify as an abandoned spouse, the taxpayer is not required to

Generally, itemized deductions are personal expenses specifically allowed by the tax law.

Lila and Ted are married and have AGI of $332,000 in 2014. They had their first children this year, twins. Lila and Ted will be allowed a deduction for personal and dependency exemptions of

In 2011, Leo's wife died. Leo has two small children, ages 2 and 4, living at home whom he supports entirely. Leo does not remarry and is not claimed as a dependent on another's return during any of this period. In 2012, 2013, and 2014, Leo's most advantageous filing status is, respectively

An Introduction to Taxation

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, Cost Recovery, Amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Section 1231 and Recapture

Special Tax Computation Methods, Tax Credits, and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters

Exam 2: Determination of Tax

A taxpayer can receive innocent spouse relief if

If a 13-year-old has earned income of $500 and unearned income of $2,500, all of the income can be reported on the parent's return.

John supports Kevin, his cousin, who lived with him throughout 2014. John also supports three other individuals who do not live with him: Assume that Donna, Melissa, Morris and Kevin each earn less than $3,950. How many personal and dependency exemptions may John claim?

The oldest age at which the "Kiddie Tax" could apply to a dependent child is

Frank, age 17, received $4,000 of dividends and $1,500 from a part-time job. Frank is a dependent of his parents who are in the 28% percent bracket. Frank's taxable income is

Which of the following dependent relatives does not have to live in the same household as the taxpayer who is claiming head of household filing status?

In 2014, Sam is single and rents an apartment for which he pays $800 per month and makes charitable contributions of $1,000. Sam's adjusted gross income is $47,000. Required: Compute his taxable income. Show all calculations.

In order to qualify to file as surviving spouse, all of the following criteria must be met by the widow or widower except

In October 2013, Joy and Paul separated and have not lived with each other since, but they are still legally married. They do not file a joint return. Joy supports their children after the separation and pays the cost of maintaining their home. Joy's filing status in 2013 and 2014 is, respectively,

Rena and Ronald, a married couple, each earn a salary of $200,000. They will be required to pay additional payroll taxes in 2014 of

Ryan and Edith file a joint return showing $130,000 of AGI (with no exclusions under Secs. 911, 931, and 933). They have three dependent children ages 7, 9, and 13. What is the amount of their child credit?

On June 1, 2014, Ellen turned 65. Ellen has been a widow for five years and has no dependents. Her standard deduction is

To qualify as an abandoned spouse, the taxpayer is not required to

Generally, itemized deductions are personal expenses specifically allowed by the tax law.

Lila and Ted are married and have AGI of $332,000 in 2014. They had their first children this year, twins. Lila and Ted will be allowed a deduction for personal and dependency exemptions of

In 2011, Leo's wife died. Leo has two small children, ages 2 and 4, living at home whom he supports entirely. Leo does not remarry and is not claimed as a dependent on another's return during any of this period. In 2012, 2013, and 2014, Leo's most advantageous filing status is, respectively

An Introduction to Taxation

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Itemized Deductions

Losses and Bad Debts

Employee Expenses and Deferred Compensation

Depreciation, Cost Recovery, Amortization, and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Section 1231 and Recapture

Special Tax Computation Methods, Tax Credits, and Payment of Tax

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

Filters