Question 1

The additional standard deduction for age and blindness is greater for married taxpayers than for single taxpayers.

Accepted Answer

A) True 
 B)False  False

Question 2

For the current year, David has wages of $80,000 and the following property transactions:

Stock investment sales- 
Long-term capital gain ..........$9000
 Short-term capital loss .........(12000)
Loss on sale of camper (purchased four years ago and used for family vacations ) ...................(2000)

What is David's AGI for the current year?

Accepted Answer

A) $76,000. 
B) $77,000. 
C) $78,000. 
D) $89,000. 
E) None of these. 
A) $76,000. 
B) $77,000. 
C) $78,000. 
D) $89,000. 
E) None of these. B

Question 3

After Ellie moves out of the apartment she had rented as her personal residence, she recovers her damage deposit of $1,000.The $1,000 is not income to Ellie.

Accepted Answer

A) True 
 B)False  True

Question 4

Lee, a citizen of Korea, is a resident of the United States.Any rent income Lee receives from land he owns in Korea is not subject to the U.S.income tax.

Accepted Answer

A) True 
 B)False

Question 5

Matching 
Regarding classification as a dependent, classify each statement in one of the four categories:
-A granddaughter, who lives with taxpayer, is 19 years old, earns $5,000, and is not a full-time student.

Accepted Answer

A) Could be a qualifying child. 
B) Could be a qualifying relative. 
C) Could be either a qualifying child or a qualifying relative. 
D) Could be neither a qualifying child nor a qualifying relative. 
A) Could be a qualifying child. 
B) Could be a qualifying relative. 
C) Could be either a qualifying child or a qualifying relative. 
D) Could be neither a qualifying child nor a qualifying relative.

Question 6

Roy and Linda divorced in 2018.The divorce decree awards custody of their children (all under age 17) to Linda but is silent as to who is entitled to treat them as dependents for purposes of claiming the child tax credit.If Roy furnished more than half of their support, he can claim the child tax credit for them in 2019.

Accepted Answer

A) True 
 B)False

Question 7

Lucas, age 17 and single, earns $6,000 during 2019.His parents cannot claim him as a dependent if he does not live with them.

Accepted Answer

A) True 
 B)False

Question 8

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 9

Which of the following, if any, is a deduction for AGI?

Accepted Answer

A) State and local sales taxes. 
B) Interest on home mortgage. 
C) Charitable contributions. 
D) Unreimbursed moving expenses of an employee (not in the military). 
E) None of these. 
A) State and local sales taxes. 
B) Interest on home mortgage. 
C) Charitable contributions. 
D) Unreimbursed moving expenses of an employee (not in the military). 
E) None of these.

Question 10

When separate income tax returns are filed by married taxpayers, one spouse cannot claim the other spouse as a dependent.

Accepted Answer

A) True 
 B)False

Question 11

Match the statements that relate to each other.Note: Some choices may be used more than once.
-Additional standard deduction

Accepted Answer

A) Not available to 65-year old taxpayer who itemizes. 
B) Exception for U.S.citizenship or residency test (for dependency exemption purposes). 
C) Largest basic standard deduction available to a dependent who has no earned income in 2019. 
D) Considered for dependency purposes. 
E) Qualifies for head of household filing status.
F)A child (age 15) who is a dependent and has only earned income.
G)Considered in applying gross income test (for dependency exemption purposes).
H)Not considered in applying the gross income test (for dependency exemption purposes).
I)Unmarried taxpayer who can use the same tax rates as married persons filing jointly.
J)Exception to the support test (for dependency exemption purposes).
K)A child (age 16) who is a dependent and has only unearned income of $4,500.
L)No correct match provided. 
A) Not available to 65-year old taxpayer who itemizes. 
B) Exception for U.S.citizenship or residency test (for dependency exemption purposes). 
C) Largest basic standard deduction available to a dependent who has no earned income in 2019. 
D) Considered for dependency purposes. 
E) Qualifies for head of household filing status.
F)A child (age 15) who is a dependent and has only earned income.
G)Considered in applying gross income test (for dependency exemption purposes).
H)Not considered in applying the gross income test (for dependency exemption purposes).
I)Unmarried taxpayer who can use the same tax rates as married persons filing jointly.
J)Exception to the support test (for dependency exemption purposes).
K)A child (age 16) who is a dependent and has only unearned income of $4,500.
L)No correct match provided.

Question 12

If an individual does not spend funds that have been received from another source (e.g., interest on municipal bonds), the unexpended amounts are not considered for purposes of the support test.

Accepted Answer

A) True 
 B)False

Question 13

Regarding the tax formula and its relationship to Form 1040, which of the following statements, if any, is correct?

Accepted Answer

A) Most exclusions from gross income are reported on page 2 of Form 1040. 
B) An above-the-line deduction refers to a deduction from AGI. 
C) A "Schedule 1 deduction" refers to a deduction for AGI. 
D) A taxpayer's AGI amount appears both at the bottom of page 1 and at the top of page 2 of Form 1040. 
E) None of these. 
A) Most exclusions from gross income are reported on page 2 of Form 1040. 
B) An above-the-line deduction refers to a deduction from AGI. 
C) A "Schedule 1 deduction" refers to a deduction for AGI. 
D) A taxpayer's AGI amount appears both at the bottom of page 1 and at the top of page 2 of Form 1040. 
E) None of these.

Question 14

For dependents who have income, special filing requirements apply.

Accepted Answer

A) True 
 B)False

Question 15

Gain on the sale of collectibles held for more than 12 months always is subject to a tax rate of 28%.

Accepted Answer

A) True 
 B)False

Question 16

In terms of income tax consequences, abandoned spouses are treated the same way as married persons filing separate returns.

Accepted Answer

A) True 
 B)False

Question 17

Under the income tax formula, a taxpayer must choose between deductions for AGI and the standard deduction.

Accepted Answer

A) True 
 B)False

Question 18

Regarding the rules applicable to filing of income tax returns, which of the following, if any, is an incorrect statement:

Accepted Answer

A) Married persons who file joint returns cannot later (after the due date of the return) substitute separate returns. 
B) Married persons who file separate returns can later (after the due date of the return) substitute a joint return. 
C) The usual test as to when a taxpayer must file a return is based on the total of the following: personal exemption + basic standard deduction + both additional standard deductions. 
D) Special filing requirement rules exist for taxpayers who are claimed as dependents of another. 
E) None of these. 
A) Married persons who file joint returns cannot later (after the due date of the return) substitute separate returns. 
B) Married persons who file separate returns can later (after the due date of the return) substitute a joint return. 
C) The usual test as to when a taxpayer must file a return is based on the total of the following: personal exemption + basic standard deduction + both additional standard deductions. 
D) Special filing requirement rules exist for taxpayers who are claimed as dependents of another. 
E) None of these.

Question 19

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 20

The basic and additional standard deductions both are subject to an annual adjustment for inflation.

Accepted Answer

A) True 
 B)False

The additional standard deduction for age and blindness is greater for married taxpayers than for single taxpayers.

After Ellie moves out of the apartment she had rented as her personal residence, she recovers her damage deposit of $1,000.The $1,000 is not income to Ellie.

Lee, a citizen of Korea, is a resident of the United States.Any rent income Lee receives from land he owns in Korea is not subject to the U.S.income tax.

Matching Regarding classification as a dependent, classify each statement in one of the four categories: -A granddaughter, who lives with taxpayer, is 19 years old, earns $5,000, and is not a full-time student.

Lucas, age 17 and single, earns $6,000 during 2019.His parents cannot claim him as a dependent if he does not live with them.

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

Which of the following, if any, is a deduction for AGI?

When separate income tax returns are filed by married taxpayers, one spouse cannot claim the other spouse as a dependent.

Match the statements that relate to each other.Note: Some choices may be used more than once. -Additional standard deduction

If an individual does not spend funds that have been received from another source (e.g., interest on municipal bonds), the unexpended amounts are not considered for purposes of the support test.

Regarding the tax formula and its relationship to Form 1040, which of the following statements, if any, is correct?

For dependents who have income, special filing requirements apply.

Gain on the sale of collectibles held for more than 12 months always is subject to a tax rate of 28%.

In terms of income tax consequences, abandoned spouses are treated the same way as married persons filing separate returns.

Under the income tax formula, a taxpayer must choose between deductions for AGI and the standard deduction.

Regarding the rules applicable to filing of income tax returns, which of the following, if any, is an incorrect statement:

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

The basic and additional standard deductions both are subject to an annual adjustment for inflation.

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 Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

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

The additional standard deduction for age and blindness is greater for married taxpayers than for single taxpayers.

After Ellie moves out of the apartment she had rented as her personal residence, she recovers her damage deposit of $1,000.The $1,000 is not income to Ellie.

Lee, a citizen of Korea, is a resident of the United States.Any rent income Lee receives from land he owns in Korea is not subject to the U.S.income tax.

Matching Regarding classification as a dependent, classify each statement in one of the four categories: -A granddaughter, who lives with taxpayer, is 19 years old, earns $5,000, and is not a full-time student.

Lucas, age 17 and single, earns $6,000 during 2019.His parents cannot claim him as a dependent if he does not live with them.

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

Which of the following, if any, is a deduction for AGI?

When separate income tax returns are filed by married taxpayers, one spouse cannot claim the other spouse as a dependent.

Match the statements that relate to each other.Note: Some choices may be used more than once. -Additional standard deduction

If an individual does not spend funds that have been received from another source (e.g., interest on municipal bonds), the unexpended amounts are not considered for purposes of the support test.

Regarding the tax formula and its relationship to Form 1040, which of the following statements, if any, is correct?

For dependents who have income, special filing requirements apply.

Gain on the sale of collectibles held for more than 12 months always is subject to a tax rate of 28%.

In terms of income tax consequences, abandoned spouses are treated the same way as married persons filing separate returns.

Under the income tax formula, a taxpayer must choose between deductions for AGI and the standard deduction.

Regarding the rules applicable to filing of income tax returns, which of the following, if any, is an incorrect statement:

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

The basic and additional standard deductions both are subject to an annual adjustment for inflation.

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 Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters