Question 1

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 2

In satisfying the support test and the gross income test for claiming someone as a dependent, a scholarship received by the person being claimed is handled the same way for each test. Do you agree or disagree with this statement? Why?

Accepted Answer

Disagree. For purposes of the support te

Question 3

Natalie is married to Chad, who abandoned her in early June of 2019. She has not seen or communicated with him since then. She maintains a household in which she and her two dependent children live. Which of the following statements about Natalie's filing status in 2019 is correct?

Accepted Answer

A)  Natalie can use the rates for single taxpayers. 
B)  Natalie can file a joint return with Chad. 
C)  Natalie can file as a surviving spouse. 
D)  Natalie can file as a head of household. 
E)  None of these statements is appropriate. 
A)  Natalie can use the rates for single taxpayers. 
B)  Natalie can file a joint return with Chad. 
C)  Natalie can file as a surviving spouse. 
D)  Natalie can file as a head of household. 
E)  None of these statements is appropriate.

Question 4

During 2019, Sandeep had the following transactions: $\begin{array}{lr}
\text { Salary } & \$ 80,000 \
\text { Interest income on City of Baltimore bonds } & 1,000 \
\text { Damages for personal injury (car accident) } & 100,000 \
\text { Punitive damages (same car accident) } & 200,000 \
\text { Cash dividends from Chevron Corporation stock } & 7,000
\end{array}$ Sandeep's AGI is:

Accepted Answer

A)  $185,000. 
B)  $187,000. 
C)  $285,000. 
D)  $287,000. 
E)  $387,000. 
A)  $185,000. 
B)  $187,000. 
C)  $285,000. 
D)  $287,000. 
E)  $387,000.

Question 5

During 2019, Trevor has the following capital transactions: $\begin{array}{lr}
\text { LTCG } & \$ 6,000 \
\text { Long-term collectible gain } & 2,000 \
\text { STCG } & 4,000 \
\text { STCL } & 10,000
\end{array}$ After the netting process, the following results:

Accepted Answer

A)  Long-term collectible gain of $2,000. 
B)  LTCG of $6,000, long-term collectible gain of $2,000, and a STCL of $6,000. 
C)  LTCG of $6,000, long-term collectible gain of $2,000, and a STCL carryover to 2019 of $3,000. 
D)  LTCG of $2,000. 
E)  None of these. 
A)  Long-term collectible gain of $2,000. 
B)  LTCG of $6,000, long-term collectible gain of $2,000, and a STCL of $6,000. 
C)  LTCG of $6,000, long-term collectible gain of $2,000, and a STCL carryover to 2019 of $3,000. 
D)  LTCG of $2,000. 
E)  None of these.

Question 6

Darren, age 20 and not disabled, earns $4,300 during 2019. Darren's parents cannot claim him as a dependent unless he is a full-time student.

Accepted Answer

A) True 
 B)False

Question 7

Clara, age 68, claims head of household filing status. If she has itemized deductions of $18,900 for 2019, she should
claim the standard deduction.

Accepted Answer

A) True 
 B)False

Question 8

Match the statements that relate to each other. Note: Choice k. may be used more than once.
-Tax Rate Schedule

Accepted Answer

A) Available to a 70-year-old father claimed as a dependent by his son. 
B) Equal to tax liability divided by taxable income. 
C) The highest income tax rate applicable to a taxpayer. 
D) Not eligible for the standard deduction. 
E) No one qualified taxpayer meets the support test.
F)Taxpayer's ex-husband does not qualify.
G)A dependent child (age 18) who has only unearned income.
H)Highest applicable rate is 37%.
I)Applicable rate could be as low as 0%.
J)Maximum rate is 28%.
K)No correct match provided. 
A) Available to a 70-year-old father claimed as a dependent by his son. 
B) Equal to tax liability divided by taxable income. 
C) The highest income tax rate applicable to a taxpayer. 
D) Not eligible for the standard deduction. 
E) No one qualified taxpayer meets the support test.
F)Taxpayer's ex-husband does not qualify.
G)A dependent child (age 18) who has only unearned income.
H)Highest applicable rate is 37%.
I)Applicable rate could be as low as 0%.
J)Maximum rate is 28%.
K)No correct match provided.

Question 9

Under the Federal income tax formula for individuals, a choice must be made between claiming deductions for AGI
and itemized deductions.

Accepted Answer

A) True 
 B)False

Question 10

Kyle, whose wife died in December 2016, filed a joint tax return for 2016. He did not remarry but has continued to maintain his home in which his two dependent children live. What is Kyle's filing status in 2019?

Accepted Answer

A)  Head of household 
B)  Surviving spouse 
C)  Single 
D)  Married filing separately 
E)  None of these 
A)  Head of household 
B)  Surviving spouse 
C)  Single 
D)  Married filing separately 
E)  None of these

Question 11

Hannah, age 70 and single, is claimed as a dependent by her daughter. During 2019, Hannah had interest income of $2,550 and $850 of earned income from babysitting. Hannah's taxable income is:

Accepted Answer

A)  $700. 
B)  $900. 
C)  $2,200. 
D)  $2,550. 
E)  None of these. 
A)  $700. 
B)  $900. 
C)  $2,200. 
D)  $2,550. 
E)  None of these.

Question 12

Stuart has a short-term capital loss, a collectible long-term capital gain, and a long-term capital gain from land held as investment. The short-term loss is first applied to the collectible capital gain.

Accepted Answer

A) True 
 B)False

Question 13

Contrast the tax consequences resulting from the following filing status situations:
a. Married filing jointly versus married filing separately.
a. Married persons filing jointly have a number of tax elections available to them that cannot be chosen if they file separate returns. For example, the credit for child and dependent care expenses and the earned income credit are not available unless married persons file joint returns.
b. Married filing separately versus single.
c. Married filing separately versus abandoned spouse status.

Accepted Answer

b. Married persons filing separately oft

Question 14

Match the statements that relate to each other. Note: Choice k. may be used more than once.
-Long-term capital gains

Accepted Answer

A) Available to a 70-year-old father claimed as a dependent by his son. 
B) Equal to tax liability divided by taxable income. 
C) The highest income tax rate applicable to a taxpayer. 
D) Not eligible for the standard deduction. 
E) No one qualified taxpayer meets the support test.
F)Taxpayer's ex-husband does not qualify.
G)A dependent child (age 18) who has only unearned income.
H)Highest applicable rate is 37%.
I)Applicable rate could be as low as 0%.
J)Maximum rate is 28%.
K)No correct match provided. 
A) Available to a 70-year-old father claimed as a dependent by his son. 
B) Equal to tax liability divided by taxable income. 
C) The highest income tax rate applicable to a taxpayer. 
D) Not eligible for the standard deduction. 
E) No one qualified taxpayer meets the support test.
F)Taxpayer's ex-husband does not qualify.
G)A dependent child (age 18) who has only unearned income.
H)Highest applicable rate is 37%.
I)Applicable rate could be as low as 0%.
J)Maximum rate is 28%.
K)No correct match provided.

Question 15

In 2019, 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 16

Kirby, a single taxpayer, has taxable income of $30,000 and is in the 12% tax bracket. During 2019, she had the following capital asset transactions: $\begin{array}{lr}
\text { Long-term gain from the sale of a coin collection } & \$ 11,000 \
\text { Long-term gain from the sale of a land investment } & 10,000 \
\text { Short-term gain from the sale of a stock investment } & 2,000
\end{array}$ Kirby's tax consequences from these gains are as follows:

Accepted Answer

A)  (5% × $10,000) + (12% × $13,000). 
B)  (12% × $13,000) + (28% × $11,000). 
C)  (0% × $10,000) + (12% × $13,000). 
D)  (12% × $23,000). 
E)  None of these. 
A)  (5% × $10,000) + (12% × $13,000). 
B)  (12% × $13,000) + (28% × $11,000). 
C)  (0% × $10,000) + (12% × $13,000). 
D)  (12% × $23,000). 
E)  None of these.

Question 17

In January 2019, Jake's wife dies and he does not remarry. For tax year 2019, Jake may not be able to use the filing status available to married persons filing joint returns.

Accepted Answer

A) True 
 B)False

Question 18

Because they appear on Schedule 1 of Form 1040, itemized deductions are also referred to as "Schedule 1 deductions."

Accepted Answer

A) True 
 B)False

Question 19

The filing status of a taxpayer (e.g., single, head of household) must be identified before the applicable standard deduction is determined.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A) True 
 B)False

Exam 3: Computing the Tax

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

In satisfying the support test and the gross income test for claiming someone as a dependent, a scholarship received by the person being claimed is handled the same way for each test. Do you agree or disagree with this statement? Why?

Natalie is married to Chad, who abandoned her in early June of 2019. She has not seen or communicated with him since then. She maintains a household in which she and her two dependent children live. Which of the following statements about Natalie's filing status in 2019 is correct?

During 2019, Sandeep had the following transactions: Salary \ 80,000 Interest income on City of Baltimore bonds 1,000 Damages for personal injury (car accident) 100,000 Punitive damages (same car accident) 200,000 Cash dividends from Chevron Corporation stock 7,000 Sandeep's AGI is:

During 2019, Trevor has the following capital transactions: LTCG \ 6,000 Long-term collectible gain 2,000 STCG 4,000 STCL 10,000 After the netting process, the following results:

Darren, age 20 and not disabled, earns $4,300 during 2019. Darren's parents cannot claim him as a dependent unless he is a full-time student.

Clara, age 68, claims head of household filing status. If she has itemized deductions of $18,900 for 2019, she should claim the standard deduction.

Match the statements that relate to each other. Note: Choice k. may be used more than once. -Tax Rate Schedule

Under the Federal income tax formula for individuals, a choice must be made between claiming deductions for AGI and itemized deductions.

Kyle, whose wife died in December 2016, filed a joint tax return for 2016. He did not remarry but has continued to maintain his home in which his two dependent children live. What is Kyle's filing status in 2019?

Hannah, age 70 and single, is claimed as a dependent by her daughter. During 2019, Hannah had interest income of $2,550 and $850 of earned income from babysitting. Hannah's taxable income is:

Stuart has a short-term capital loss, a collectible long-term capital gain, and a long-term capital gain from land held as investment. The short-term loss is first applied to the collectible capital gain.

Match the statements that relate to each other. Note: Choice k. may be used more than once. -Long-term capital gains

In 2019, Ed is 66 and single. If he has itemized deductions of $12,700, he should not claim the standard deduction alternative.

In January 2019, Jake's wife dies and he does not remarry. For tax year 2019, Jake may not be able to use the filing status available to married persons filing joint returns.

Because they appear on Schedule 1 of Form 1040, itemized deductions are also referred to as "Schedule 1 deductions."

The filing status of a taxpayer (e.g., single, head of household) must be identified before the applicable standard deduction is determined.

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

Understanding and Working With 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

Tax Credits and Payments

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses, Section 1231, and Recapture Provisions

Taxing Business Income

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

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