Question 1

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 2

Ashley had the following transactions during 2019:
$\begin{array} { l  } 
 \text {Salary }&&\$90,000\
 \text {Interest income on bonds- }\
 \text {Issued by City of Nashville }&\$4,000\
 \text {Issued by Chevron Corporation }&5,000&9,000\
 \text { Alimony received (divorce finalized in 2011)}&&5,000\
 \text {Child support received (divorce finalized in 2011) }&&20,000\
 \text {City and state income taxes paid }&&(5,000)\
 \text {Bank loan obtained to pay for car purchase }&&15,000\
\end{array}$

What is Ashley's AGI for 2019?

Accepted Answer

$100,000 [$90,000 (salary) + $5,000 (int

Question 3

As opposed to itemizing deductions from AGI, the majority of individual taxpayers choose the standard deduction.

Accepted Answer

A) True 
 B)False

Question 4

Tony, age 15, is claimed as a dependent by his grandmother. During 2019, he had interest income from Boeing Corporation bonds of $1,000 and earnings from a part-time job of $800. Tony's taxable income is:

Accepted Answer

A)  $1,800. 
B)  $1,800 - $800 - $1,100 = ($100). 
C)  $1,800 - $1,150 = $650. 
D)  $1,800 - $1,100 = $700. 
E)  None of these. 
A)  $1,800. 
B)  $1,800 - $800 - $1,100 = ($100). 
C)  $1,800 - $1,150 = $650. 
D)  $1,800 - $1,100 = $700. 
E)  None of these.

Question 5

In applying the gross income test in the case of dependents that are married, could the application of community property laws have any effect? Explain.

Accepted Answer

Most often, the application of community

Question 6

For the current year, David has wages of $80,000 and the following property transactions: $\begin{array}{llr}
  \text { Stock investment sales- } &\
 \text {  Long-term capital gain} &\$ 9,000\
 \text {  Short-term capital loss} &(12,000)\
 \text {  Loss on sale of camper (purchased four years ago and used for family vacations)} &(2,000)\
\end{array}$
 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.

Question 7

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

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 8

Sarah furnishes more than 50% of the support of her son and daughter-in-law who live with her. If the son and daughter-in-law file a joint return, Sarah cannot claim them as dependents.

Accepted Answer

A) True 
 B)False

Question 9

Match the statements that relate to each other. Note: Some choices may be used more than once.
-$1,100

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 10

A qualifying child cannot include:

Accepted Answer

A)  A nonresident alien. 
B)  A married son who files a joint return. 
C)  A daughter who is away at college. 
D)  A brother who is 28 years of age and disabled. 
E)  A grandmother. 
A)  A nonresident alien. 
B)  A married son who files a joint return. 
C)  A daughter who is away at college. 
D)  A brother who is 28 years of age and disabled. 
E)  A grandmother.

Question 11

For dependents who have income, special filing requirements apply.

Accepted Answer

A) True 
 B)False

Question 12

When filing their Federal income tax returns, the Youngs always claimed the standard deduction. After they purchased a home, however, they started to itemize their deductions from AGI.2019. Why the delay as to itemizing?
a. Explain the reason for the change.
b. Suppose they purchased the home in November 2018, but did not start itemizing until tax year

Accepted Answer

a. The interest on the home mortgage and

Question 13

In 2019, Nai-Yu had the following transactions: $\begin{array}{lc}
\text { Salary } & \$ 90,000 \
\text { Short-term capital gain from a stock investment } & 4,000 \
\text { Moving expense to change jobs } & (11,000) \text { Receipt of } \
\text { repayment of } \$ 20,000 \text { loan she made to her sister in } 2014 \text { (includes no interest) } & 20,000 \
\text { State income taxes } & (5,000)
\end{array}$ Nai-Yu's AGI is:

Accepted Answer

A)  $114,000. 
B)  $103,000. 
C)  $98,000. 
D)  $94,000. 
E)  $83,000. 
A)  $114,000. 
B)  $103,000. 
C)  $98,000. 
D)  $94,000. 
E)  $83,000.

Question 14

Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live. Crissa, age 22, earns
$11,000 during 2019 as a model. Katelyn does not qualify for head of household filing status.

Accepted Answer

A) True 
 B)False

Question 15

Lena is 66 years of age, single, and blind and is not claimed as a dependent. How much gross income must she have before she is required to file a Federal income tax return for 2019?

Accepted Answer

$13,850 [$12,200 (basic standard deducti

Question 16

Married taxpayers who file a joint return cannot later (i.e., after the filing due date) switch to separate returns for that year.

Accepted Answer

A) True 
 B)False

Question 17

In terms of the tax formula applicable to individual taxpayers, which of the following statements, if any, 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 18

In order to claim someone other than a qualifying child as a dependent, a taxpayer must meet the support test.
Generally, this is done by furnishing more than 50% of a dependent's support. What exceptions exist, if any, where the support furnished need not be more than 50%?

Accepted Answer

One exception involves the multiple supp

Question 19

Mandeep's parents live in another state and she cannot claim them as her dependents. If Mandeep pays their medical expenses, can she derive any tax benefit from doing so? Explain.

Accepted Answer

If Mandeep could otherwise cla

Question 20

Monique is a resident of the United States and a citizen of France. If she files a U.S. income tax return, Monique
cannot claim the standard deduction.

Accepted Answer

A) True 
 B)False

Exam 3: Computing the Tax

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

As opposed to itemizing deductions from AGI, the majority of individual taxpayers choose the standard deduction.

Tony, age 15, is claimed as a dependent by his grandmother. During 2019, he had interest income from Boeing Corporation bonds of $1,000 and earnings from a part-time job of $800. Tony's taxable income is:

In applying the gross income test in the case of dependents that are married, could the application of community property laws have any effect? Explain.

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

Sarah furnishes more than 50% of the support of her son and daughter-in-law who live with her. If the son and daughter-in-law file a joint return, Sarah cannot claim them as dependents.

Match the statements that relate to each other. Note: Some choices may be used more than once. -$1,100

A qualifying child cannot include:

For dependents who have income, special filing requirements apply.

In 2019, Nai-Yu had the following transactions: Salary \ 90,000 Short-term capital gain from a stock investment 4,000 Moving expense to change jobs (11,000) Receipt of repayment of \ 20,000 loan she made to her sister in 2014 (includes no interest) 20,000 State income taxes (5,000) Nai-Yu's AGI is:

Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live. Crissa, age 22, earns $11,000 during 2019 as a model. Katelyn does not qualify for head of household filing status.

Lena is 66 years of age, single, and blind and is not claimed as a dependent. How much gross income must she have before she is required to file a Federal income tax return for 2019?

Married taxpayers who file a joint return cannot later (i.e., after the filing due date) switch to separate returns for that year.

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

In order to claim someone other than a qualifying child as a dependent, a taxpayer must meet the support test. Generally, this is done by furnishing more than 50% of a dependent's support. What exceptions exist, if any, where the support furnished need not be more than 50%?

Mandeep's parents live in another state and she cannot claim them as her dependents. If Mandeep pays their medical expenses, can she derive any tax benefit from doing so? Explain.

Monique is a resident of the United States and a citizen of France. If she files a U.S. income tax return, Monique cannot claim 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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