Question 1

Which filing status reaches the 37% marginal rate at the lowest level of taxable income?

Accepted Answer

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

Question 2

Assuming a calendar tax year and the conventional 15th of the month due date,all of the following business entities must file their 2019 tax returns by the March 15,2020 except

Accepted Answer

A) the C corporation. 
B) the S corporation. 
C) the partnership. 
D) All of the above entities must file their 2019 tax returns by March 15,2020. 
A) the C corporation. 
B) the S corporation. 
C) the partnership. 
D) All of the above entities must file their 2019 tax returns by March 15,2020.

Question 3

Husband and wife,who live in a common law state,are eligible to file a joint return for 2019,but elect to file separately.Wife has adjusted gross income of $25,000 and has $2,200 of expenditures which qualify as itemized deductions.Husband deducts itemized deductions of $14,200.What is the taxable income for the wife?

Accepted Answer

A) $12,600 
B) $22,800 
C) $25,000 
D) None of the above 
A) $12,600 
B) $22,800 
C) $25,000 
D) None of the above

Question 4

In 2019,Brett and Lashana (both 50 years old)file a joint tax return claiming as a dependent their son who is blind.Their standard deduction is

Accepted Answer

A) $24,400. 
B) $25,700. 
C) $26,050. 
D) $13,850. 
A) $24,400. 
B) $25,700. 
C) $26,050. 
D) $13,850.

Question 5

For each of the following taxpayers,indicate the applicable filing status and the number of children who qualify for the child credit.
a.Jeffrey is a widower,age 71,who receives a pension of $10,000,nontaxable social security benefits of $12,000,and interest of $2,000.He has no dependents.
b.Selma is a single,full-time college student,age 20,who earned $6,800 working part-time.She has $1,700 of interest income and received $1,000 support from her parents.
c.Olivia is married,but her husband left her three years ago and she has not seen or heard from him since.She supports herself and her six-year-old daughter.She paid all the household expenses.Her income consists of salary of $18,500 and interest of $800.
d.Ruben is a single,full-time college student,age 20,who earned $6,800 working part-time.He has $250 of interest income and received $10,000 support from his parents.
e.Cathy is divorced and received $12,000 alimony from her former husband and earned $35,000 working as an administrative assistant.She also received $2,500 of child support for her daughter who lives with her.Cathy filed the appropriate IRS form and gave up the dependency exemption to her former husband.

Accepted Answer

The answer of For each of the following taxpayers,indicate the...

Question 6

Satish,age 11,is a dependent of his parents.His only source of income in 2019 is $8,000 of interest income on bonds given him by his grandparents,resulting in taxable income of $6,900.Under kiddie tax rules,calculation of tax requires dividing taxable income between net unearned income and earned taxable income.Satish's taxable income will be divided as follows:

Accepted Answer

A) net unearned income -$6,900 and earned taxable income -$0. 
B) net unearned income -$5,800 and earned taxable income -$1,100. 
C) net unearned income -$0 and earned taxable income -$6,900. 
D) net unearned income -$8,000 and earned taxable income -$1,100. 
A) net unearned income -$6,900 and earned taxable income -$0. 
B) net unearned income -$5,800 and earned taxable income -$1,100. 
C) net unearned income -$0 and earned taxable income -$6,900. 
D) net unearned income -$8,000 and earned taxable income -$1,100.

Question 7

Form 4868,a six-month extension of time to file,allows a taxpayer to

Accepted Answer

A) avoid interest on underpayment of taxes due. 
B) extend the filing date of the return as well as payment of the tax due. 
C) extend the filing date of the return but the estimated amount of tax due must still be paid by the original due date of the return. 
D) extend the filing date only at the discretion of the IRS. 
A) avoid interest on underpayment of taxes due. 
B) extend the filing date of the return as well as payment of the tax due. 
C) extend the filing date of the return but the estimated amount of tax due must still be paid by the original due date of the return. 
D) extend the filing date only at the discretion of the IRS.

Question 8

Edward,a widower whose wife died in 2016,maintains a household for himself and his 10-year-old daughter.Edward's most favorable filing status for 2019 is

Accepted Answer

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

Question 9

Taxpayers have the choice of claiming either deductions for AGI or the standard deduction.

Accepted Answer

A) True 
 B)False

Question 10

A married couple need not live together to file a joint return.

Accepted Answer

A) True 
 B)False

Question 11

John supports Kevin,his cousin,who lived with him throughout 2019.John also supports three other individuals who do not live with him: Donna,who is John's mother
Melissa,who John's stepsister
Morris,who is John's cousin
Assume that Donna,Melissa,Morris,and Kevin each earn less than $4,200.How many dependents can John claim?

Accepted Answer

A) 1 
B) 2 
C) 3 
D) 4 
A) 1 
B) 2 
C) 3 
D) 4

Question 12

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 13

In October 2019,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 2019 and 2020 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 14

You may choose married filing jointly as your filing status if you are married and both you and your spouse agree to file a joint return.Which of the following facts would prevent you from being considered married for filing purposes?

Accepted Answer

A) You were married for several years,but your divorce became final in December. 
B) You are married but living apart until some problems can be solved. 
C) Your spouse died during the year. 
D) None of the above 
A) You were married for several years,but your divorce became final in December. 
B) You are married but living apart until some problems can be solved. 
C) Your spouse died during the year. 
D) None of the above

Question 15

An unmarried taxpayer may file as head of household if he maintains a home for his qualifying child.

Accepted Answer

A) True 
 B)False

Question 16

Artco Inc.is a C corporation.This year it earned $50,000 of taxable income and paid a $10,000 distribution (dividend)to Lily,its sole shareholder.Lily has a marginal tax rate of 24%.Due to the corporation's results and the distribution paid,the IRS will receive total taxes of

Accepted Answer

A) $12,000. 
B) $12,900. 
C) $13,500. 
D) $10,500. 
A) $12,000. 
B) $12,900. 
C) $13,500. 
D) $10,500.

Question 17

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

Accepted Answer

A) True 
 B)False

Question 18

All of the following items are included in gross income except

Accepted Answer

A) pension benefits received. 
B) rent income. 
C) interest earned on a bank account. 
D) child support payments received. 
A) pension benefits received. 
B) rent income. 
C) interest earned on a bank account. 
D) child support payments received.

Question 19

Nonrefundable 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

Question 20

On June 1,2019,Ellen turned 65.Ellen has been a widow for five years and has no dependents.Her standard deduction is

Accepted Answer

A) $25,700. 
B) $24,400. 
C) $13,850. 
D) $12,200. 
A) $25,700. 
B) $24,400. 
C) $13,850. 
D) $12,200.

Exam 18: Determination of Tax

Which filing status reaches the 37% marginal rate at the lowest level of taxable income?

Assuming a calendar tax year and the conventional 15th of the month due date,all of the following business entities must file their 2019 tax returns by the March 15,2020 except

In 2019,Brett and Lashana (both 50 years old)file a joint tax return claiming as a dependent their son who is blind.Their standard deduction is

Form 4868,a six-month extension of time to file,allows a taxpayer to

Edward,a widower whose wife died in 2016,maintains a household for himself and his 10-year-old daughter.Edward's most favorable filing status for 2019 is

Taxpayers have the choice of claiming either deductions for AGI or the standard deduction.

A married couple need not live together to file a joint return.

A taxpayer can receive innocent spouse relief if

In October 2019,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 2019 and 2020 is,respectively

You may choose married filing jointly as your filing status if you are married and both you and your spouse agree to file a joint return.Which of the following facts would prevent you from being considered married for filing purposes?

An unmarried taxpayer may file as head of household if he maintains a home for his qualifying child.

Artco Inc.is a C corporation.This year it earned $50,000 of taxable income and paid a $10,000 distribution (dividend)to Lily,its sole shareholder.Lily has a marginal tax rate of 24%.Due to the corporation's results and the distribution paid,the IRS will receive total taxes of

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

All of the following items are included in gross income except

Nonrefundable 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.

On June 1,2019,Ellen turned 65.Ellen has been a widow for five years and has no dependents.Her standard deduction is

Tax Research

Corporate Formations and Capital Structure

The Corporate Income Tax

Corporate Nonliquidating Distributions

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Corporate Acquisitions and Reorganizations

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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

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