Question 1

For 2012, Jackson has taxable income of $30,005.When he uses the Tax Tables, Jackson finds that his tax liability is higher than under the Tax Rate Schedules.

Accepted Answer

The answer of For 2012, Jackson has taxable income of...

Question 2

The kiddie tax does not apply as to a child whose earned income is more than one-half of his or her support.

Accepted Answer

A) True 
 B)False

Question 3

Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live.Crissa, age 22, earns $11,000 during 2012 as a model.Katelyn does qualify for head of household filing status.

Accepted Answer

A) True 
 B)False

Question 4

In determining whether the support test is met for dependency exemption purposes, only the taxable portion of a scholarship is considered.

Accepted Answer

A) True 
 B)False

Question 5

Regarding head of household filing status, comment on the following:

Accepted Answer

The answer of Regarding head of household filing status, comment...

Question 6

Emily, whose husband died in December 2011, maintains a household in which her dependent daughter lives.Which (if any) of the following is her filing status for the tax year 2012? (Note: Emily is the executor of her husband's estate.)

Accepted Answer

A) Single. 
B) Married, filing separately. 
C) Surviving spouse. 
D) Head of household. 
E) Married, filing jointly. 
A) Single. 
B) Married, filing separately. 
C) Surviving spouse. 
D) Head of household. 
E) Married, filing jointly.

Question 7

Regarding the Tax Tables applicable to the Federal income tax, which of the following statements is correct?

Accepted Answer

A) For any one year, the Tax Tables are issued by the IRS after the Tax Rate Schedules. 
B) The Tax Tables will yield the same amount of tax as the Tax Rate Schedules. 
C) Taxpayers can elect as to whether the use the Tax Tables or the Tax Rate Schedules. 
D) The Tax Tables can be used by an estate but not by a trust. 
E) No correct answer given. 
A) For any one year, the Tax Tables are issued by the IRS after the Tax Rate Schedules. 
B) The Tax Tables will yield the same amount of tax as the Tax Rate Schedules. 
C) Taxpayers can elect as to whether the use the Tax Tables or the Tax Rate Schedules. 
D) The Tax Tables can be used by an estate but not by a trust. 
E) No correct answer given.

Question 8

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

Accepted Answer

A) $185,000. 
B) $187,000. 
C) $285,000. 
D) $287,000. 
E) $385,000. 
A) $185,000. 
B) $187,000. 
C) $285,000. 
D) $287,000. 
E) $385,000.

Question 9

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

Accepted Answer

· Unearned income of $1,900 or less.
· A

Question 10

Ashley earns a salary of $55,000, has capital gains of $3,000, and interest income of $5,000 in 2012.Her husband died in 2011.Ashley has a dependent son, Tyrone, who is age 8.Her itemized deductions are $9,000.

Accepted Answer

The answer of Ashley earns a salary of $55,000, has...

Question 11

Gain on the sale of collectibles held for more than 12 months could be subject to tax at a rate lower than 28%.

Accepted Answer

A) True 
 B)False

Question 12

Jayden and Chloe Harper are husband and wife and use the calendar year for tax purposes.

Accepted Answer

The answer of Jayden and Chloe Harper are husband and...

Question 13

Butch and Minerva are divorced in December of 2012.Since they were married for more than one-half of the year, they are considered asmarried for 2012.

Accepted Answer

A) True 
 B)False

Question 14

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 15

During 2012, Jen (age 66) furnished more than 50% of the support of the following persons:   Presuming all other dependency tests are met, on a separate return how many personal and dependency exemptions may Jen 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.

Question 16

Regarding the rules applicable to filing of income tax returns, which, if any, of the following is an incorrect statement:

Accepted Answer

A) Married persons who file joint returns cannot later (after the due date of the return) substitute separate returns. 
B) Married persons who file separate returns can later (after the due date of the return) substitute a joint return. 
C) The usual test as to when a taxpayer must file a return is based on the total of the following: personal exemption + basic standard deduction + both additional standard deductions. 
D) Special filing requirement rules exist for taxpayers who are claimed as dependents of another. 
E) None of the above. 
A) Married persons who file joint returns cannot later (after the due date of the return) substitute separate returns. 
B) Married persons who file separate returns can later (after the due date of the return) substitute a joint return. 
C) The usual test as to when a taxpayer must file a return is based on the total of the following: personal exemption + basic standard deduction + both additional standard deductions. 
D) Special filing requirement rules exist for taxpayers who are claimed as dependents of another. 
E) None of the above.

Question 17

Tony, age 15, is claimed as a dependent by his grandmother.During 2012, Tony had interest income from Boeing Corporation bonds of $1,000 and earnings from a part-time job of $700.Tony's taxable income is:

Accepted Answer

A) $0. 
B) $1,700 - $700 - $950 = $50. 
C) $1,700 - $1,000 = $700. 
D) $1,700 - $950 = $750. 
E) None of the above. 
A) $0. 
B) $1,700 - $700 - $950 = $50. 
C) $1,700 - $1,000 = $700. 
D) $1,700 - $950 = $750. 
E) None of the above.

Question 18

Millie, age 80, is supported during the current year as follows:   During the year, Millie lives in an assisted living facility.Under a multiple support agreement, indicate which parties can qualify to claim Millie as a dependent.

Accepted Answer

A) Weston and Faith. 
B) Faith. 
C) Weston, Faith, Jake, and Brayden. 
D) Faith, Jake, and Brayden. 
E) None of the above. 
A) Weston and Faith. 
B) Faith. 
C) Weston, Faith, Jake, and Brayden. 
D) Faith, Jake, and Brayden. 
E) None of the above.

Question 19

The basic and additional standard deductions are not subject to an annual adjustment for inflation.

Accepted Answer

A) True 
 B)False

Question 20

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

Accepted Answer

A person being claimed as a de

Exam 3: Computing the Tax

For 2012, Jackson has taxable income of $30,005.When he uses the Tax Tables, Jackson finds that his tax liability is higher than under the Tax Rate Schedules.

The kiddie tax does not apply as to a child whose earned income is more than one-half of his or her support.

Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live.Crissa, age 22, earns $11,000 during 2012 as a model.Katelyn does qualify for head of household filing status.

In determining whether the support test is met for dependency exemption purposes, only the taxable portion of a scholarship is considered.

Regarding head of household filing status, comment on the following:

Emily, whose husband died in December 2011, maintains a household in which her dependent daughter lives.Which (if any) of the following is her filing status for the tax year 2012? (Note: Emily is the executor of her husband's estate.)

Regarding the Tax Tables applicable to the Federal income tax, which of the following statements is correct?

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

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

Ashley earns a salary of $55,000, has capital gains of $3,000, and interest income of $5,000 in 2012.Her husband died in 2011.Ashley has a dependent son, Tyrone, who is age 8.Her itemized deductions are $9,000.

Gain on the sale of collectibles held for more than 12 months could be subject to tax at a rate lower than 28%.

Jayden and Chloe Harper are husband and wife and use the calendar year for tax purposes.

Butch and Minerva are divorced in December of 2012.Since they were married for more than one-half of the year, they are considered asmarried for 2012.

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.

During 2012, Jen (age 66) furnished more than 50% of the support of the following persons: Presuming all other dependency tests are met, on a separate return how many personal and dependency exemptions may Jen claim?

Regarding the rules applicable to filing of income tax returns, which, if any, of the following is an incorrect statement:

Tony, age 15, is claimed as a dependent by his grandmother.During 2012, Tony had interest income from Boeing Corporation bonds of $1,000 and earnings from a part-time job of $700.Tony's taxable income is:

Millie, age 80, is supported during the current year as follows: During the year, Millie lives in an assisted living facility.Under a multiple support agreement, indicate which parties can qualify to claim Millie as a dependent.

The basic and additional standard deductions are not subject to an annual adjustment for inflation.

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

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