Question 1

Which, if any, of the following is a correct statement relating to the kiddie tax in 2018?

Accepted Answer

A)  If the parents are divorced, the income of the noncustodial parent is used to determine the allocable parental tax. 
B)  The components for the application of the kiddie tax are not subject to adjustment for inflation. 
C)  If the kiddie tax applies, the parents must include the income of the child on their own income tax return. 
D)  The kiddie tax does not apply if both parents of the child are deceased. 
E)  None of these. 
A)  If the parents are divorced, the income of the noncustodial parent is used to determine the allocable parental tax. 
B)  The components for the application of the kiddie tax are not subject to adjustment for inflation. 
C)  If the kiddie tax applies, the parents must include the income of the child on their own income tax return. 
D)  The kiddie tax does not apply if both parents of the child are deceased. 
E)  None of these.

Question 2

Jason and Peg are married and file a joint return. Both are over 65 years of age and Jason is blind. Their standard deduction for 2018 is $27,900 $24,000 + $1,300 + $1,300 + $1,300).

Accepted Answer

A) True 
 B)False

Question 3

In terms of the tax formula applicable to individual taxpayers, which, if any, of the following statements is correct?

Accepted Answer

A)  In arriving at taxable income, a taxpayer must choose between the standard deduction and itemized deductions. 
B)  In arriving at AGI, personal and dependency exemptions are subtracted from gross income. 
C)  In arriving at taxable income, a taxpayer must choose between the standard deduction and the deduction for qualified business income. 
D)  The tax formula does not apply if a taxpayer elects to claim the standard deduction. 
E)  None of these. 
A)  In arriving at taxable income, a taxpayer must choose between the standard deduction and itemized deductions. 
B)  In arriving at AGI, personal and dependency exemptions are subtracted from gross income. 
C)  In arriving at taxable income, a taxpayer must choose between the standard deduction and the deduction for qualified business income. 
D)  The tax formula does not apply if a taxpayer elects to claim the standard deduction. 
E)  None of these.

Question 4

An "above the line" deduction refers to a deduction for AGI.

Accepted Answer

A) True 
 B)False

Question 5

Millie, age 80, is supported during the current year as follows: $$\begin{array}{l}

\begin{array} { lc } 
&\text { Percent of Support }\
\text { Weston (a son) } & 20 \% \
\text { Faith (a daughter) } & 35 \% \
\text { Jake (a cousin) } & 25 \% \
\text { Brayden (unrel ated close family friend) } & 20 \%
\end{array}
\end{array}$$ During the year, Millie lives in an assisted living facility. Under a multiple support agreement, indicate which parties can qualify to claim Millie as a dependent.

Accepted Answer

A)  Weston and Faith. 
B)  Faith. 
C)  Weston, Faith, Jake, and Brayden. 
D)  Faith, Jake, and Brayden. 
E)  None of these. 
A)  Weston and Faith. 
B)  Faith. 
C)  Weston, Faith, Jake, and Brayden. 
D)  Faith, Jake, and Brayden. 
E)  None of these.

Question 6

In which, if any, of the following situations will the kiddie tax not apply?

Accepted Answer

A)  The child is married but does not file a joint return. 
B)  The child has unearned income of $2,100 or less. 
C)  The child has unearned income that exceeds more than half of his or her) support. 
D)  The child is under age 24 and a full-time student. 
E)  None of these. 
A)  The child is married but does not file a joint return. 
B)  The child has unearned income of $2,100 or less. 
C)  The child has unearned income that exceeds more than half of his or her) support. 
D)  The child is under age 24 and a full-time student. 
E)  None of these.

Question 7

In 2018, Hal furnishes more than half of the support of his ex-wife and her father, both of whom live with him. The divorce occurred in 2017. Hal may claim the father-in-law and the ex-wife as dependents.

Accepted Answer

A) True 
 B)False

Question 8

For tax purposes, married persons filing separate returns are treated the same as single taxpayers.

Accepted Answer

A) True 
 B)False

Question 9

An increase in a taxpayer's AGI could decrease the amount of charitable contribution that can be claimed.

Accepted Answer

A) True 
 B)False

Question 10

For dependents who have income, special filing requirements apply.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following taxpayers may file as a head of household in 2018? Marco provides all the support for his mother, Sienna, who lives by herself in an apartment in Fort Lauderdale. Marco pays the rent and other expenses for the apartment and properly claims his mother as a dependent.
Tammy provides over one-half the support for her 18-year old brother, Dan. Dan earned $4,200 in 2018 working at a fast food restaurant and is saving his money to attend college in 2019. Dan lives in Tammy's home.
Juan's wife left him late in December of 2017. No legal action was taken and Juan has not heard from her in 2018. Juan supported his 6-year-old son, who lived with him throughout 2018.

Accepted Answer

A)  Marco only 
B)  Tammy only 
C)  Juan only 
D)  Marco and Juan only 
E)  Marco, Tammy, and Juan 
A)  Marco only 
B)  Tammy only 
C)  Juan only 
D)  Marco and Juan only 
E)  Marco, Tammy, and Juan

Question 12

During the year, Kim sold the following assets: business auto for a $1,000 loss, stock investment for a $1,000 loss, and pleasure yacht for a $1,000 loss. Presuming adequate income, how much of these losses may Kim claim?

Accepted Answer

A)  $0. 
B)  $1,000. 
C)  $2,000. 
D)  $3,000. 
E)  None of these. 
A)  $0. 
B)  $1,000. 
C)  $2,000. 
D)  $3,000. 
E)  None of these.

Question 13

Dan and Donna are husband and wife and file separate returns for the year. If Dan itemizes his deductions from
AGI, Donna cannot claim the standard deduction.

Accepted Answer

A) True 
 B)False

Question 14

In terms of timing as to any one year, the Tax Tables are available before the Tax Rate Schedules.

Accepted Answer

A) True 
 B)False

Question 15

A decrease in a taxpayer's AGI could increase the amount of medical expenses that can be deducted.

Accepted Answer

A) True 
 B)False

Question 16

During 2018, Marvin had the following transactions: $\begin{array}{lr}
\text { Salary } & \$ 50,000 \
\text { Bank loan (proceeds used to buy personal auto) } & 10,000 \
\text { Alimony paid (divorce was finalized in 2010). } & 12,000 \
\text { Child support paid } & 6,000 \
\text { Gift from aunt } & 20,000
\end{array}$
Marvy's s AG is

Accepted Answer

A)  $ \$ 332,000 $ 
B)  $ 388,000$ 
C)  $ 844,000 $ 
D)  $ 856,000 . $ 
E)  $ 864,000 . $ 
A)  $ \$ 332,000 $ 
B)  $ 388,000$ 
C)  $ 844,000 $ 
D)  $ 856,000 . $ 
E)  $ 864,000 . $

Question 17

Albert buys his mother a TV. For purposes of meeting the support test, Albert cannot include the cost of the TV.

Accepted Answer

A) True 
 B)False

Question 18

Which, if any, of the statements regarding the standard deduction is correct?

Accepted Answer

A)  Some taxpayers may qualify for two types of standard deductions. 
B)  The standard deduction is not available to taxpayers who are dependents. 
C)  The standard deduction may be taken as a for AGI deduction. 
D)  The basic standard deduction is indexed for inflation but the additional standard deduction is not. 
E)  None of these. 
A)  Some taxpayers may qualify for two types of standard deductions. 
B)  The standard deduction is not available to taxpayers who are dependents. 
C)  The standard deduction may be taken as a for AGI deduction. 
D)  The basic standard deduction is indexed for inflation but the additional standard deduction is not. 
E)  None of these.

Question 19

In 2018, Ed is 66 and single. If he has itemized deductions of $12,700, he should not claim the standard deduction alternative.

Accepted Answer

A) True 
 B)False

Question 20

In determining the filing requirement based on gross income received, both additional standard deductions i.e., age and blindness) are taken into account.

Accepted Answer

A) True 
 B)False

Which, if any, of the following is a correct statement relating to the kiddie tax in 2018?

Jason and Peg are married and file a joint return. Both are over 65 years of age and Jason is blind. Their standard deduction for 2018 is $27,900 $24,000 + $1,300 + $1,300 + $1,300).

In terms of the tax formula applicable to individual taxpayers, which, if any, of the following statements is correct?

An "above the line" deduction refers to a deduction for AGI.

In which, if any, of the following situations will the kiddie tax not apply?

In 2018, Hal furnishes more than half of the support of his ex-wife and her father, both of whom live with him. The divorce occurred in 2017. Hal may claim the father-in-law and the ex-wife as dependents.

For tax purposes, married persons filing separate returns are treated the same as single taxpayers.

An increase in a taxpayer's AGI could decrease the amount of charitable contribution that can be claimed.

For dependents who have income, special filing requirements apply.

During the year, Kim sold the following assets: business auto for a $1,000 loss, stock investment for a $1,000 loss, and pleasure yacht for a $1,000 loss. Presuming adequate income, how much of these losses may Kim claim?

Dan and Donna are husband and wife and file separate returns for the year. If Dan itemizes his deductions from AGI, Donna cannot claim the standard deduction.

In terms of timing as to any one year, the Tax Tables are available before the Tax Rate Schedules.

A decrease in a taxpayer's AGI could increase the amount of medical expenses that can be deducted.

During 2018, Marvin had the following transactions: Salary \ 50,000 Bank loan (proceeds used to buy personal auto) 10,000 Alimony paid (divorce was finalized in 2010). 12,000 Child support paid 6,000 Gift from aunt 20,000 Marvy's s AG is

Albert buys his mother a TV. For purposes of meeting the support test, Albert cannot include the cost of the TV.

Which, if any, of the statements regarding the standard deduction is correct?

In 2018, Ed is 66 and single. If he has itemized deductions of $12,700, he should not claim the standard deduction alternative.

In determining the filing requirement based on gross income received, both additional standard deductions i.e., age and blindness) are taken into account.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Filters

Exam 3: Tax Formula and Tax Determination an Overview of Property Transactions

Which, if any, of the following is a correct statement relating to the kiddie tax in 2018?

Jason and Peg are married and file a joint return. Both are over 65 years of age and Jason is blind. Their standard deduction for 2018 is $27,900 $24,000 + $1,300 + $1,300 + $1,300).

In terms of the tax formula applicable to individual taxpayers, which, if any, of the following statements is correct?

An "above the line" deduction refers to a deduction for AGI.

In which, if any, of the following situations will the kiddie tax not apply?

In 2018, Hal furnishes more than half of the support of his ex-wife and her father, both of whom live with him. The divorce occurred in 2017. Hal may claim the father-in-law and the ex-wife as dependents.

For tax purposes, married persons filing separate returns are treated the same as single taxpayers.

An increase in a taxpayer's AGI could decrease the amount of charitable contribution that can be claimed.

For dependents who have income, special filing requirements apply.

During the year, Kim sold the following assets: business auto for a $1,000 loss, stock investment for a $1,000 loss, and pleasure yacht for a $1,000 loss. Presuming adequate income, how much of these losses may Kim claim?

Dan and Donna are husband and wife and file separate returns for the year. If Dan itemizes his deductions from AGI, Donna cannot claim the standard deduction.

In terms of timing as to any one year, the Tax Tables are available before the Tax Rate Schedules.

A decrease in a taxpayer's AGI could increase the amount of medical expenses that can be deducted.

During 2018, Marvin had the following transactions: Salary \ 50,000 Bank loan (proceeds used to buy personal auto) 10,000 Alimony paid (divorce was finalized in 2010). 12,000 Child support paid 6,000 Gift from aunt 20,000 Marvy's s AG is

Albert buys his mother a TV. For purposes of meeting the support test, Albert cannot include the cost of the TV.

Which, if any, of the statements regarding the standard deduction is correct?

In 2018, Ed is 66 and single. If he has itemized deductions of $12,700, he should not claim the standard deduction alternative.

In determining the filing requirement based on gross income received, both additional standard deductions i.e., age and blindness) are taken into account.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Filters