Question 1

For the year a spouse dies, the surviving spouse is considered married for the entire year for income tax purposes.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

The amount of income earned by the quali

Question 4

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

Accepted Answer

A) In arriving at AGI, a taxpayer must elect between claiming deductions for AGI and deductions from AGI. 
B) In arriving at taxable income, a taxpayer must elect between claiming deductions for AGI and deductions from AGI. 
C) If a taxpayer has deductions for AGI, the standard deduction is not available. 
D) In arriving at taxable income, a taxpayer must elect between deductions for AGI and the standard deduction. 
E) None of the above. 
A) In arriving at AGI, a taxpayer must elect between claiming deductions for AGI and deductions from AGI. 
B) In arriving at taxable income, a taxpayer must elect between claiming deductions for AGI and deductions from AGI. 
C) If a taxpayer has deductions for AGI, the standard deduction is not available. 
D) In arriving at taxable income, a taxpayer must elect between deductions for AGI and the standard deduction. 
E) None of the above.

Question 5

Ed is divorced and maintains a home in which he and a dependent friend live.Ed does not qualify for head of household filing status.

Accepted Answer

A) True 
 B)False

Question 6

Katrina, age 16, is claimed as a dependent by her parents.During 2012, she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,900 ($5,600 earned income + $300).

Accepted Answer

A) True 
 B)False

Question 7

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.

Accepted Answer

The answer of When filing their Federal income tax returns,...

Question 8

A taxpayer who itemizes must use Form 1040, and cannot use Form 1040EZ or Form 1040A.

Accepted Answer

A) True 
 B)False

Question 9

Deductions for AGI are often referred to as "above-the-line" or "page 1" deductions.Explain.

Accepted Answer

"Above the line" means before

Question 10

Dan and Donna are husband and wife and file separate returns for the year.If Dan itemizes his deductions from AGI, Donna still can claim the standard deduction.

Accepted Answer

A) True 
 B)False

Question 11

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 12

Many taxpayers who previously itemized will start claiming the standard deduction when they purchase a home.

Accepted Answer

A) True 
 B)False

Question 13

Debby, age 18, is claimed as a dependent by her mother.During 2012, she earned $1,100 in interest income on a savings account.Debby's standard deduction is $1,400 ($1,100 + $300).

Accepted Answer

A) True 
 B)False

Question 14

During 2012, Esther had the following transactions:   Esther's AGI is:

Accepted Answer

A) $62,000. 
B) $64,000. 
C) $67,000. 
D) $102,000. 
E) $104,000. 
A) $62,000. 
B) $64,000. 
C) $67,000. 
D) $102,000. 
E) $104,000.

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

In 2012, Hal furnishes more than half of the support of his ex-wife and her father, both of whom live with him.The divorce occurred in 2011.Hal may claim the father-in-law and the ex-wife as dependents.

Accepted Answer

A) True 
 B)False

Question 17

Under the Federal income tax formula for individuals, the determination of adjusted gross income (AGI) follows that of taxable income (TI).

Accepted Answer

A) True 
 B)False

Question 18

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 19

A child who is married can be subject to the kiddie tax.

Accepted Answer

A) True 
 B)False

Question 20

Evan and Eileen Carter are husband and wife and file a joint return for 2012.Both are under 65 years of age.They provide more than half of the support of their daughter, Pamela (age 25), who is a full-time medical student.Pamela receives a $5,000 scholarship covering her tuition at college.They furnish all of the support of Belinda (Evan's grandmother), who is age 80 and lives in a nursing home.They also support Peggy (age 66), who is a friend of the family and lives with them.How many dependency exemptions may the Carters claim?

Accepted Answer

A) Two. 
B) Three. 
C) Four. 
D) Five. 
E) None of the above. 
A) Two. 
B) Three. 
C) Four. 
D) Five. 
E) None of the above.

Exam 3: Computing the Tax

For the year a spouse dies, the surviving spouse is considered married for the entire year for income tax purposes.

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

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

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

Ed is divorced and maintains a home in which he and a dependent friend live.Ed does not qualify for head of household filing status.

Katrina, age 16, is claimed as a dependent by her parents.During 2012, she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,900 ($5,600 earned income + $300).

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.

A taxpayer who itemizes must use Form 1040, and cannot use Form 1040EZ or Form 1040A.

Deductions for AGI are often referred to as "above-the-line" or "page 1" deductions.Explain.

Dan and Donna are husband and wife and file separate returns for the year.If Dan itemizes his deductions from AGI, Donna still can claim the standard deduction.

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

Many taxpayers who previously itemized will start claiming the standard deduction when they purchase a home.

Debby, age 18, is claimed as a dependent by her mother.During 2012, she earned $1,100 in interest income on a savings account.Debby's standard deduction is $1,400 ($1,100 + $300).

During 2012, Esther had the following transactions: Esther's AGI is:

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

In 2012, Hal furnishes more than half of the support of his ex-wife and her father, both of whom live with him.The divorce occurred in 2011.Hal may claim the father-in-law and the ex-wife as dependents.

Under the Federal income tax formula for individuals, the determination of adjusted gross income (AGI) follows that of taxable income (TI).

A qualifying child cannot include:

A child who is married can be subject to the kiddie tax.

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-Part 1

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 2

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

Alternative Minimum Tax

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

Income Taxation of Trusts and Estates

Filters