Question 1

Which of the following statements regarding for AGI tax deductions is true?

Accepted Answer

A) Taxpayers subtract for AGI deductions from gross income to determine AGI. 
B) A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's standard deduction amount. 
C) The deduction for qualified business income is a for AGI deduction. 
D) A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's itemized deductions. 
A) Taxpayers subtract for AGI deductions from gross income to determine AGI. 
B) A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's standard deduction amount. 
C) The deduction for qualified business income is a for AGI deduction. 
D) A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's itemized deductions.

Question 2

Taxpayers are generally allowed to claim deductions for expenditures unless a specific tax provision indicates the expenditure is not deductible.

Accepted Answer

A) True 
 B)False

Question 3

The test for qualifying child includes an age restriction but the test for qualifying relative does not.

Accepted Answer

A) True 
 B)False

Question 4

For purposes of the qualifying child residence test, a child's temporary absence from the taxpayer's home to attend school full time is counted as though the child lived in the taxpayer's home during the absence.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following types of income are not considered ordinary income?

Accepted Answer

A) Compensation income. 
B) Short term capital gains. 
C) Qualified dividend income. 
D) Both compensation income and qualified dividend income. 
E) Both short term capital gains and qualified dividend income. 
A) Compensation income. 
B) Short term capital gains. 
C) Qualified dividend income. 
D) Both compensation income and qualified dividend income. 
E) Both short term capital gains and qualified dividend income.

Question 6

Greg is single. During 2020, he received $60,000 of salary from his employer. That was his only source of income. He reported $3,000 of for AGI deductions and $9,000 of itemized deductions. The 2020 standard deduction amount for a single taxpayer is $12,400. What is Greg's taxable income?

Accepted Answer

$44,600, c

Question 7

If an unmarried taxpayer iseligible to claim another as a dependent, the taxpayer is automatically eligible for the head of household filing status.

Accepted Answer

A) True 
 B)False

Question 8

The Dashwoods have calculated their taxable income to be $88,000 for 2020, which includes $2,000 of long-term capital gains. Using the appropriate tax rate schedules, calculate the Dashwoods' income tax liability assuming they are married and file a joint return.

Accepted Answer

$10,800, computed as

Question 9

Which of the following statements regarding the difference between the requirements for a qualifying child and the requirements for a qualifying relative is false?

Accepted Answer

A) The relationship requirement is more broadly defined (more inclusive)for qualifying relatives than for qualifying children. 
B) Qualifying children are subject to age restrictions while qualifying relatives are not. 
C) The support test for qualifying relatives focuses on the support the potential dependent self-provides while the support test for qualifying children focuses on the support the taxpayer provides. 
D) Qualifying relatives are subject to a gross income restriction while qualifying children are not. 
A) The relationship requirement is more broadly defined (more inclusive)for qualifying relatives than for qualifying children. 
B) Qualifying children are subject to age restrictions while qualifying relatives are not. 
C) The support test for qualifying relatives focuses on the support the potential dependent self-provides while the support test for qualifying children focuses on the support the taxpayer provides. 
D) Qualifying relatives are subject to a gross income restriction while qualifying children are not.

Question 10

Anna is a 21-year-old full-time college student (she plans on returning home at the end of the school year). Her total support for the year was $34,000 (including $8,000 of tuition). Anna covered $12,000 of her support costs out of her own pocket (from savings, she did not work)and she received an $8,000 scholarship that covered all of her tuition costs. Which of the following statements regarding who is allowed to claim Anna as an exemption is true?

Accepted Answer

A) Even if Anna's parents provided the remaining $14,000 of support for Anna ($34,000 minus $12,000 minus $8,000), they would not be able to claim her as a dependent. 
B) Even if Anna's grandparents provided the remaining $14,000 of support for Anna ($34,000 minus $12,000 minus $8,000), they would not be able to claim her as a dependent. 
C) Because she provided more than half her own support, Anna would not qualify as her parents' dependent. 
D) None of these statements are true. 
A) Even if Anna's parents provided the remaining $14,000 of support for Anna ($34,000 minus $12,000 minus $8,000), they would not be able to claim her as a dependent. 
B) Even if Anna's grandparents provided the remaining $14,000 of support for Anna ($34,000 minus $12,000 minus $8,000), they would not be able to claim her as a dependent. 
C) Because she provided more than half her own support, Anna would not qualify as her parents' dependent. 
D) None of these statements are true.

Question 11

Jane is unmarried and has no children, but provides more than half of her mother's financial support. Jane's mother lives in an apartment across town and has a part-time job earning $5,000 a year. Which is the most advantageous filing status available to Jane?

Accepted Answer

A) Single. 
B) Head of household. 
C) Qualifying individual. 
D) Surviving single. 
A) Single. 
B) Head of household. 
C) Qualifying individual. 
D) Surviving single.

Question 12

Catherine de Bourgh has one child, Anne, who is 18 years old at the end of the year. Anne lived at home for seven months during the year before leaving home to attend State University for the remaining five months of the year. During the year, Anne earned $6,000 while working part time. Catherine provided 80 percent of Anne's support and Anne provided the rest. Which of the following statements regarding whether Anne is Catherine's qualifying child for the current year is correct?

Accepted Answer

A) Anne is a qualifying child of Catherine. 
B) Anne is not a qualifying child of Catherine because she fails the gross income test. 
C) Anne is not a qualifying child of Catherine because she fails the residence test. 
D) Anne is not a qualifying child of Catherine because she fails the support test. 
A) Anne is a qualifying child of Catherine. 
B) Anne is not a qualifying child of Catherine because she fails the gross income test. 
C) Anne is not a qualifying child of Catherine because she fails the residence test. 
D) Anne is not a qualifying child of Catherine because she fails the support test.

Question 13

Jane and Ed Rochester are married with a 2-year-old child, who lives with them and whom they support financially. In 2020, Ed and Jane realized the following items of income and expense:
   They also qualified for a $2,000 child tax credit. Their employers withheld $5,800 in federal income taxes from their paychecks (in the aggregate). Finally, the 2020 standard deduction amount for MFJ taxpayers is $24,800.
What is the couple's adjusted gross income?

Accepted Answer

$99,000, s

Question 14

Which of the following statements regarding dependents is false?

Accepted Answer

A) A taxpayer may be allowed to claim another as a dependent even if the taxpayer has no family relationship with the other person. 
B) To qualify as a dependent of another, an individual must be a resident of the United States. 
C) An individual who qualifies as a dependent of another taxpayer may not claim any dependents. 
D) An individual cannot qualify as a dependent of another as a qualifying relative taxpayer if the individual's gross income exceeds a certain amount. 
A) A taxpayer may be allowed to claim another as a dependent even if the taxpayer has no family relationship with the other person. 
B) To qualify as a dependent of another, an individual must be a resident of the United States. 
C) An individual who qualifies as a dependent of another taxpayer may not claim any dependents. 
D) An individual cannot qualify as a dependent of another as a qualifying relative taxpayer if the individual's gross income exceeds a certain amount.

Question 15

A taxpayer may qualify for the head of household filing status if she has no dependent children but pays more than half of the cost of maintaining a separate household for her dependent parent.

Accepted Answer

A) True 
 B)False

Question 16

For purposes ofdetermining filing status, which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

Accepted Answer

A) The taxpayer claims a child as a dependent. 
B) The taxpayer pays more than half the costs of maintaining his or her home for the entire year and the home is the principal residence for a dependent qualifying child for more than half the year. 
C) The taxpayer files a tax return separate from the other spouse. 
D) The spouse does not live in the taxpayer's home at all during the year. 
A) The taxpayer claims a child as a dependent. 
B) The taxpayer pays more than half the costs of maintaining his or her home for the entire year and the home is the principal residence for a dependent qualifying child for more than half the year. 
C) The taxpayer files a tax return separate from the other spouse. 
D) The spouse does not live in the taxpayer's home at all during the year.

Question 17

Which of the following is NOT a from AGI deduction?

Accepted Answer

A) Standard deduction. 
B) Itemized deduction. 
C) Deduction for qualified business income. 
D) None of these. All of these are from AGI deductions. 
A) Standard deduction. 
B) Itemized deduction. 
C) Deduction for qualified business income. 
D) None of these. All of these are from AGI deductions.

Question 18

Filing status determines all of the following except ___________

Accepted Answer

A) the applicable standard deduction amount. 
B) the appropriate tax rate schedule or tax table. 
C) the top-stated marginal rate in the tax rate schedule. 
D) the AGI threshold for reductions in certain tax benefits. 
A) the applicable standard deduction amount. 
B) the appropriate tax rate schedule or tax table. 
C) the top-stated marginal rate in the tax rate schedule. 
D) the AGI threshold for reductions in certain tax benefits.

Question 19

All of the following are for AGI deductions except:

Accepted Answer

A) Contributions to qualified retirement accounts. 
B) Rental and royalty expenses. 
C) Business expenses for a self-employed taxpayer. 
D) None of the above. All of the above are for AGI deductions. 
A) Contributions to qualified retirement accounts. 
B) Rental and royalty expenses. 
C) Business expenses for a self-employed taxpayer. 
D) None of the above. All of the above are for AGI deductions.

Question 20

In certain circumstances, a taxpayer who provides less than half the support of another may still be able to claim that person as a dependent as a qualifying relative.

Accepted Answer

A) True 
 B)False

Exam 4: Individual Income Tax Overview, Dependents, and Filing Status

Which of the following statements regarding for AGI tax deductions is true?

Taxpayers are generally allowed to claim deductions for expenditures unless a specific tax provision indicates the expenditure is not deductible.

The test for qualifying child includes an age restriction but the test for qualifying relative does not.

For purposes of the qualifying child residence test, a child's temporary absence from the taxpayer's home to attend school full time is counted as though the child lived in the taxpayer's home during the absence.

Which of the following types of income are not considered ordinary income?

Greg is single. During 2020, he received $60,000 of salary from his employer. That was his only source of income. He reported $3,000 of for AGI deductions and $9,000 of itemized deductions. The 2020 standard deduction amount for a single taxpayer is $12,400. What is Greg's taxable income?

If an unmarried taxpayer iseligible to claim another as a dependent, the taxpayer is automatically eligible for the head of household filing status.

The Dashwoods have calculated their taxable income to be $88,000 for 2020, which includes $2,000 of long-term capital gains. Using the appropriate tax rate schedules, calculate the Dashwoods' income tax liability assuming they are married and file a joint return.

Which of the following statements regarding the difference between the requirements for a qualifying child and the requirements for a qualifying relative is false?

Jane is unmarried and has no children, but provides more than half of her mother's financial support. Jane's mother lives in an apartment across town and has a part-time job earning $5,000 a year. Which is the most advantageous filing status available to Jane?

Which of the following statements regarding dependents is false?

A taxpayer may qualify for the head of household filing status if she has no dependent children but pays more than half of the cost of maintaining a separate household for her dependent parent.

For purposes ofdetermining filing status, which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

Which of the following is NOT a from AGI deduction?

Filing status determines all of the following except ___________

All of the following are for AGI deductions except:

In certain circumstances, a taxpayer who provides less than half the support of another may still be able to claim that person as a dependent as a qualifying relative.

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters