Question 1

During 2018, Marvin had the following transactions:  
Marvin's AGI is:

Accepted Answer

A)  $32,000. 
B)  $38,000. 
C)  $44,000. 
D)  $56,000. 
E)  $64,000. 
A)  $32,000. 
B)  $38,000. 
C)  $44,000. 
D)  $56,000. 
E)  $64,000. B

Question 2

Natalie is married to Chad, who abandoned her in early June of 2018. 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 2018 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. D

Question 3

During 2018, Trevor has the following capital transactions:  
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. D

Question 4

The deduction for personal and dependency exemptions has been suspended from 2018 through 2025.

Accepted Answer

A) True 
 B)False

Question 5

In 2018, Nai-Yu had the following transactions:  
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 6

For the past few years, Corey's filing status has been as follows: 2014 (married/joint)? 2015 (married/separate)? 2016 (surviving spouse)? 2017 (surviving spouse)? and 2018 (head of household). Explain what probably has happened.

Accepted Answer

One probable explanation is that Corey's

Question 7

Which, if any, of the following 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 8

In meeting the criteria of a qualifying child for dependency purposes, when if ever, might the child's income become relevant?

Accepted Answer

The amount of income earned by the quali

Question 9

List at least three exceptions to the application of the kiddie tax.

Accepted Answer

.Unearned income of $2,100 or less.
. Ag

Question 10

Regarding classification as a dependent, classify each statement in one of the four categories:
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 stepdaughter who does not live with taxpayer.

Accepted Answer

The answer of Regarding classification as a dependent, classify each...

Question 11

In resolving qualified child status for dependency purposes, why are tiebreaker rules necessary? Can these rules be waived?

Accepted Answer

A person being claimed as a dependent ma

Question 12

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 13

For the current year, David has wages of $80,000 and the following property transactions:  
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 14

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 15

Regarding head of household filing status, comment on the following:
a. A taxpayer qualifies even though he maintains a household which he and the dependent do not share.
b. A taxpayer does not qualify even though the person sharing the household is a dependent.
c. The usual eventual filing status of a surviving spouse.

Accepted Answer

a. If the household is that of a depende

Question 16

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

Accepted Answer

The answer of Match the statements that relate to each...

Question 17

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 18

Match the statements that relate to each other. Note: Choice l. may be used more than once.
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.
-Relationship test (for dependency exemption purposes)

Accepted Answer

The answer of Match the statements that relate to each...

Question 19

Lee, a citizen of Korea, is a resident of the U.S. 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 20

Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live. Crissa, age 22, earns $11,000 during 2018 as a model. Katelyn does not qualify for head of household filing status.

Accepted Answer

A) True 
 B)False

Exam 3: Computing the Tax

During 2018, Marvin had the following transactions: Marvin's AGI is:

Natalie is married to Chad, who abandoned her in early June of 2018. 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 2018 is correct?

During 2018, Trevor has the following capital transactions: After the netting process, the following results:

The deduction for personal and dependency exemptions has been suspended from 2018 through 2025.

In 2018, Nai-Yu had the following transactions: Nai-Yu's AGI is:

For the past few years, Corey's filing status has been as follows: 2014 (married/joint)? 2015 (married/separate)? 2016 (surviving spouse)? 2017 (surviving spouse)? and 2018 (head of household). Explain what probably has happened.

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

In meeting the criteria of a qualifying child for dependency purposes, when if ever, might the child's income become relevant?

List at least three exceptions to the application of the kiddie tax.

In resolving qualified child status for dependency purposes, why are tiebreaker rules necessary? Can these rules be waived?

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

For the current year, David has wages of $80,000 and the following property transactions: What is David's AGI for the current year?

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

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).

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

Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live. Crissa, age 22, earns $11,000 during 2018 as a model. Katelyn does not qualify for head of household filing status.

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

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

Filters