Question 1

Nonresident aliens are allowed a full standard deduction.

Accepted Answer

A) True 
 B)False  False

Question 2

Nate and Nikki have two dependent children ages 12 and 15.Their modified AGI is $410,000.What is the amount of the child credit to which they are entitled?

Accepted Answer

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

Question 3

Refundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.

Accepted Answer

A) True 
 B)False  False

Question 4

A building used in a business is sold after five years of use for a gain.The gain will be treated as a long-term capital gain.

Accepted Answer

A) True 
 B)False

Question 5

A widow or widower whose spouse passed away in the current year may file a joint tax return as long as the widow or widower does not remarry before the end of the year.

Accepted Answer

A) True 
 B)False

Question 6

The annual tax reporting form filed with the IRS by C corporations is the Schedule C.

Accepted Answer

A) True 
 B)False

Question 7

Steven and Susie Tyler have three children ages 13,15,and 19.The 19-year-old is in the military and not a dependent.Their modified AGI is $108,000.What is the amount of the child credit to which they are entitled?

Accepted Answer

A) $0 
B) $2,000 
C) $4,000 
D) $6,000 
A) $0 
B) $2,000 
C) $4,000 
D) $6,000

Question 8

Ivan Trent,age five,receive $2,900 of dividends per year from a mutual fund he owns; it is his only source of taxable income.Ivan's parents plan to gift a corporate bond they currently own to him.The bond pays $4,100 of interest income per year.Ivan's parents are in the 37% tax bracket.The individual income tax rate schedule that generally applies to a single taxpayer indicates a 10% tax rate until taxable income of $9,700.Ivan's family will save tax at the rate of 27% (37% - 10% tax rates)on the bond interest income if the parents transfer the bond to Ivan.

Accepted Answer

A) True 
 B)False

Question 9

Ray is starting a new business with a friend and trying to decide between a C corporation,S corporation,and partnership.Which of the following statements regarding his decision is correct?

Accepted Answer

A) An S corporation owner must pay income taxes only on the salary received. 
B) A partner in a partnership is taxed on his or her share of partnership income. 
C) A shareholder in a C corporation is taxed on his or her share of corporate income. 
D) S corporations pay taxes on their current year income. 
A) An S corporation owner must pay income taxes only on the salary received. 
B) A partner in a partnership is taxed on his or her share of partnership income. 
C) A shareholder in a C corporation is taxed on his or her share of corporate income. 
D) S corporations pay taxes on their current year income.

Question 10

Dave,age 59 and divorced,is the sole support of his mother age 83,who is a resident of a local nursing home for the entire year.Dave's mother had no income for the year.Dave's filing status is

Accepted Answer

A) married filing separately. 
B) single. 
C) head of household. 
D) married filing jointly. 
A) married filing separately. 
B) single. 
C) head of household. 
D) married filing jointly.

Question 11

Which of the following credits is considered a refundable credit?

Accepted Answer

A) credit for elderly and disabled 
B) earned income credit 
C) adoption expense credit 
D) lifetime learning credit 
A) credit for elderly and disabled 
B) earned income credit 
C) adoption expense credit 
D) lifetime learning credit

Question 12

If a single taxpayer with a marginal tax rate of 37% has a long-term capital gain,it is taxed at

Accepted Answer

A) 0%. 
B) 20%. 
C) 10%. 
D) 15%. 
A) 0%. 
B) 20%. 
C) 10%. 
D) 15%.

Question 13

Kelly is age 23 and a full-time student with interest and dividend income of $2,600 in the current year.The total cost of her support for the year is $19,000.She is not subject to the kiddie tax.

Accepted Answer

A) True 
 B)False

Question 14

Parents must provide more than half the support of their child under the age of 19 in order for the child to be considered as a dependent qualifying child.

Accepted Answer

A) True 
 B)False

Question 15

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 daughter's dependent status over to her ex-spouse by filing the appropriate IRS form.What is Sally's filing status for the current year?

Accepted Answer

A) single 
B) surviving spouse 
C) head of household 
D) married filing separately 
A) single 
B) surviving spouse 
C) head of household 
D) married filing separately

Question 16

Annisa,who is 28 and single,has adjusted gross income of $55,000,itemized deductions of $5,000 and a lifetime learning credit of $1,000.In 2019,Annisa will have taxable income of

Accepted Answer

A) $42,800. 
B) $49,000. 
C) $50,000. 
D) $41,800. 
A) $42,800. 
B) $49,000. 
C) $50,000. 
D) $41,800.

Question 17

For purposes of the dependency exemption,a qualifying child must be under age 19,a full-time student under age 24,or a permanently and totally disabled child.

Accepted Answer

A) True 
 B)False

Question 18

Amanda has two dependent children,ages 10 and 12.She earned $30,000 from her job,and her income tax before credits is $1,200.How much of her child credit is refundable?

Accepted Answer

A) $1,200 
B) $1,400 
C) $2,800 
D) $4,000 
A) $1,200 
B) $1,400 
C) $2,800 
D) $4,000

Question 19

In order to shift the taxation of dividend income from a parent to a child

Accepted Answer

A) the parent must direct the corporation to pay the dividend to the child. 
B) the parent must transfer ownership of the stock to the child. 
C) the parent can deposit the dividend in the child's bank account. 
D) all of the above will result in shifting the taxation to the child. 
A) the parent must direct the corporation to pay the dividend to the child. 
B) the parent must transfer ownership of the stock to the child. 
C) the parent can deposit the dividend in the child's bank account. 
D) all of the above will result in shifting the taxation to the child.

Question 20

Which of the following is not considered support for the dependent support test?

Accepted Answer

A) food 
B) clothing 
C) rental value of lodging 
D) value of services rendered by the taxpayer for the dependent 
A) food 
B) clothing 
C) rental value of lodging 
D) value of services rendered by the taxpayer for the dependent

Exam 18: Determination of Tax

Nonresident aliens are allowed a full standard deduction.

Nate and Nikki have two dependent children ages 12 and 15.Their modified AGI is $410,000.What is the amount of the child credit to which they are entitled?

Refundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.

A building used in a business is sold after five years of use for a gain.The gain will be treated as a long-term capital gain.

A widow or widower whose spouse passed away in the current year may file a joint tax return as long as the widow or widower does not remarry before the end of the year.

The annual tax reporting form filed with the IRS by C corporations is the Schedule C.

Steven and Susie Tyler have three children ages 13,15,and 19.The 19-year-old is in the military and not a dependent.Their modified AGI is $108,000.What is the amount of the child credit to which they are entitled?

Ray is starting a new business with a friend and trying to decide between a C corporation,S corporation,and partnership.Which of the following statements regarding his decision is correct?

Dave,age 59 and divorced,is the sole support of his mother age 83,who is a resident of a local nursing home for the entire year.Dave's mother had no income for the year.Dave's filing status is

Which of the following credits is considered a refundable credit?

If a single taxpayer with a marginal tax rate of 37% has a long-term capital gain,it is taxed at

Kelly is age 23 and a full-time student with interest and dividend income of $2,600 in the current year.The total cost of her support for the year is $19,000.She is not subject to the kiddie tax.

Parents must provide more than half the support of their child under the age of 19 in order for the child to be considered as a dependent qualifying child.

Annisa,who is 28 and single,has adjusted gross income of $55,000,itemized deductions of $5,000 and a lifetime learning credit of $1,000.In 2019,Annisa will have taxable income of

For purposes of the dependency exemption,a qualifying child must be under age 19,a full-time student under age 24,or a permanently and totally disabled child.

Amanda has two dependent children,ages 10 and 12.She earned $30,000 from her job,and her income tax before credits is $1,200.How much of her child credit is refundable?

In order to shift the taxation of dividend income from a parent to a child

Which of the following is not considered support for the dependent support test?

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

Other Corporate Tax Levies

Corporate Liquidating Distributions

Corporate Acquisitions and Reorganizations

Consolidated Tax Returns

Partnership Formation and Operation

Special Partnership Issues

S Corporations

The Gift Tax

The Estate Tax

Income Taxation of Trusts and Estates

Administrative Procedures

U.S. Taxation of Foreign-Related Transactions

an Introduction to Taxation

Gross Income: Inclusions

Gross Income: Exclusions

Property Transactions: Capital Gains and Losses

Deductions and Losses

Business Expenses and Deferred Compensation

Itemized Deductions

Losses and Bad Debts

Depreciation,cost Recovery,amortization,and Depletion

Accounting Periods and Methods

Property Transactions: Nontaxable Exchanges

Property Transactions: Sec1231 and Recapture

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

Tax Research

Corporations

Partnerships and S Corporations

Taxes and Investment Planning

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