Question 1

Match the statements that relate to each other.Note: Choice L may be used more than once.
-Territorial system of taxation

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 ex­husband does not qualify.
G)A dependent child (age 18)who has only unearned income.
H)Highest applicable rate is 39.6%.
I)Applicable rate could be as low as 0%.
J)Maximum rate is 28%.
K)Income from foreign sources is not subject to tax.
L)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 ex­husband does not qualify.
G)A dependent child (age 18)who has only unearned income.
H)Highest applicable rate is 39.6%.
I)Applicable rate could be as low as 0%.
J)Maximum rate is 28%.
K)Income from foreign sources is not subject to tax.
L)No correct match provided.

Question 2

Merle is a widow,age 80 and blind,who is claimed as a dependent by her son.During 2014,she received $4,800 in Social Security benefits,$2,500 in bank interest,and $1,800 in cash dividends from stocks.Merle's taxable income is:

Accepted Answer

A) $4,300 - $1,000 - $3,100 = $200. 
B) $4,300 - $3,100 = $1,200. 
C) $4,300 - $1,000 - $1,550 = $1,750. 
D) $9,100 - $1,000 - $3,100 = $5,000. 
E) None of these. 
A) $4,300 - $1,000 - $3,100 = $200. 
B) $4,300 - $3,100 = $1,200. 
C) $4,300 - $1,000 - $1,550 = $1,750. 
D) $9,100 - $1,000 - $3,100 = $5,000. 
E) None of these.

Question 3

In which,if any,of the following situations may the individual not be claimed as a dependent of the taxpayer?

Accepted Answer

A) A former spouse who lives with the taxpayer (divorce took place last year). 
B) A stepmother who does not live with the taxpayer. 
C) A married daughter who lives with the taxpayer. 
D) A half-brother who does not live with the taxpayer and is a citizen and resident of Canada. 
E) A cousin who does not live with the taxpayer. 
A) A former spouse who lives with the taxpayer (divorce took place last year). 
B) A stepmother who does not live with the taxpayer. 
C) A married daughter who lives with the taxpayer. 
D) A half-brother who does not live with the taxpayer and is a citizen and resident of Canada. 
E) A cousin who does not live with the taxpayer.

Question 4

Which,if any,of the following is a correct statement relating to the kiddie tax?

Accepted Answer

A) If the parents are divorced,the income of the noncustodial parent is used to determine the allocable parental tax. 
B) The components for the application of the kiddie tax are not subject to adjustment for inflation. 
C) If the kiddie tax applies,the parents must include the income of the child on their own income tax return. 
D) The kiddie tax does not apply if both parents of the child are deceased. 
E) None of these. 
A) If the parents are divorced,the income of the noncustodial parent is used to determine the allocable parental tax. 
B) The components for the application of the kiddie tax are not subject to adjustment for inflation. 
C) If the kiddie tax applies,the parents must include the income of the child on their own income tax return. 
D) The kiddie tax does not apply if both parents of the child are deceased. 
E) None of these.

Question 5

For the current year,David has salary income of $80,000 and the following property transactions: Stock investment sales-
Long-term capital gain $ 9,000
Short-term capital loss (12,000)
Loss on sale of camper (purchased 4 years ago and used for family vacations)(2,000)
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 6

Debby,age 18,is claimed as a dependent by her mother.During 2014,she earned $1,100 in interest income on a savings account.Debby's standard deduction is $1,450 ($1,100 + $350).

Accepted Answer

A) True 
 B)False

Question 7

Katrina,age 16,is claimed as a dependent by her parents.During 2014,she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,950 ($5,600 earned income + $350).

Accepted Answer

A) True 
 B)False

Question 8

Regarding dependency exemptions,classify each statement in one of the four categories:
-A daughter who does not live with taxpayer.

Accepted Answer

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) 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.

Question 9

In which,if any,of the following situations will the kiddie tax not apply?

Accepted Answer

A) The child is married but does not file a joint return. 
B) The child has unearned income of $2,000 or less. 
C) The child has unearned income that exceeds more than half of his (or her)support. 
D) The child is under age 24 and a full-time student. 
E) None of these. 
A) The child is married but does not file a joint return. 
B) The child has unearned income of $2,000 or less. 
C) The child has unearned income that exceeds more than half of his (or her)support. 
D) The child is under age 24 and a full-time student. 
E) None of these.

Question 10

Regarding dependency exemptions,classify each statement in one of the four categories:
-A son lives with taxpayer and earns $3,000.

Accepted Answer

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) 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.

Question 11

Homer (age 68)and his wife Jean (age 70)file a joint return.They furnish all of the support of Luther (Homer's 90-year old father),who lives with them.In 2014,they received $6,000 of interest income on city of Chicago bonds and interest income on corporate bonds of $48,000.Compute Homer and Jean's taxable income for 2014.

Accepted Answer

$21,350.Their gross income is $48,000 si

Question 12

Meg,age 23,is a full-time law student and is claimed by her parents as a dependent.During 2014,she received $1,400 interest income from a bank savings account and $6,000 from a part­time job.What is Meg's taxable income for 2014?

Accepted Answer

$1,200.Meg's standard deduction is the g

Question 13

In 2014,Frank sold his personal use automobile for a loss of $9,000.He also sold a personal coin collection for a gain of $10,000.As a result of these sales,$10,000 is subject to income tax.

Accepted Answer

A) True 
 B)False

Question 14

Taylor had the following transactions for 2014:

Accepted Answer

$76,000.$85,000 (salary)+ $3,000 (raffle

Question 15

Butch and Minerva are divorced in December of 2014.Since they were married for more than one-half of the year,they are considered as married for 2014.

Accepted Answer

A) True 
 B)False

Question 16

Arnold is married to Sybil,who abandoned him in 2013.He has not seen or communicated with her since April of that year.He maintains a household in which their son,Evans,lives.Evans is age 25 and earns over $6,000 each year.For tax year 2014,Arnold's filing status is:

Accepted Answer

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

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 2014 is $16,000 ($12,400 + $1,200 + $1,200 + $1,200).

Accepted Answer

A) True 
 B)False

Question 18

Regarding dependency exemptions,classify each statement in one of the four categories:
-A family friend who is supported by and lives with the taxpayer.

Accepted Answer

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) 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.

Question 19

Match the statements that relate to each other.Note: Choice L may be used more than once.
-Kiddie tax does not apply

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. 
D) Considered for dependency exemption 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. 
D) Considered for dependency exemption 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 20

A child who has unearned income of $2,000 or less cannot be subject to the kiddie tax.

Accepted Answer

A) True 
 B)False

Match the statements that relate to each other.Note: Choice L may be used more than once. -Territorial system of taxation

Merle is a widow,age 80 and blind,who is claimed as a dependent by her son.During 2014,she received $4,800 in Social Security benefits,$2,500 in bank interest,and $1,800 in cash dividends from stocks.Merle's taxable income is:

In which,if any,of the following situations may the individual not be claimed as a dependent of the taxpayer?

Which,if any,of the following is a correct statement relating to the kiddie tax?

Debby,age 18,is claimed as a dependent by her mother.During 2014,she earned $1,100 in interest income on a savings account.Debby's standard deduction is $1,450 ($1,100 + $350).

Katrina,age 16,is claimed as a dependent by her parents.During 2014,she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,950 ($5,600 earned income + $350).

Regarding dependency exemptions,classify each statement in one of the four categories: -A daughter who does not live with taxpayer.

In which,if any,of the following situations will the kiddie tax not apply?

Regarding dependency exemptions,classify each statement in one of the four categories: -A son lives with taxpayer and earns $3,000.

Meg,age 23,is a full-time law student and is claimed by her parents as a dependent.During 2014,she received $1,400 interest income from a bank savings account and $6,000 from a parttime job.What is Meg's taxable income for 2014?

In 2014,Frank sold his personal use automobile for a loss of $9,000.He also sold a personal coin collection for a gain of $10,000.As a result of these sales,$10,000 is subject to income tax.

Taylor had the following transactions for 2014:

Butch and Minerva are divorced in December of 2014.Since they were married for more than one-half of the year,they are considered as married for 2014.

Arnold is married to Sybil,who abandoned him in 2013.He has not seen or communicated with her since April of that year.He maintains a household in which their son,Evans,lives.Evans is age 25 and earns over $6,000 each year.For tax year 2014,Arnold's filing status is:

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 2014 is $16,000 ($12,400 + $1,200 + $1,200 + $1,200).

Regarding dependency exemptions,classify each statement in one of the four categories: -A family friend who is supported by and lives with the taxpayer.

Match the statements that relate to each other.Note: Choice L may be used more than once. -Kiddie tax does not apply

A child who has unearned income of $2,000 or less cannot 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

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Exam 3: Tax Formula and Tax Determination;an Overview of Property Transactions

Match the statements that relate to each other.Note: Choice L may be used more than once. -Territorial system of taxation

Merle is a widow,age 80 and blind,who is claimed as a dependent by her son.During 2014,she received $4,800 in Social Security benefits,$2,500 in bank interest,and $1,800 in cash dividends from stocks.Merle's taxable income is:

In which,if any,of the following situations may the individual not be claimed as a dependent of the taxpayer?

Which,if any,of the following is a correct statement relating to the kiddie tax?

Debby,age 18,is claimed as a dependent by her mother.During 2014,she earned $1,100 in interest income on a savings account.Debby's standard deduction is $1,450 ($1,100 + $350).

Katrina,age 16,is claimed as a dependent by her parents.During 2014,she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,950 ($5,600 earned income + $350).

Regarding dependency exemptions,classify each statement in one of the four categories: -A daughter who does not live with taxpayer.

In which,if any,of the following situations will the kiddie tax not apply?

Regarding dependency exemptions,classify each statement in one of the four categories: -A son lives with taxpayer and earns $3,000.

Meg,age 23,is a full-time law student and is claimed by her parents as a dependent.During 2014,she received $1,400 interest income from a bank savings account and $6,000 from a part­time job.What is Meg's taxable income for 2014?

In 2014,Frank sold his personal use automobile for a loss of $9,000.He also sold a personal coin collection for a gain of $10,000.As a result of these sales,$10,000 is subject to income tax.

Taylor had the following transactions for 2014:

Butch and Minerva are divorced in December of 2014.Since they were married for more than one-half of the year,they are considered as married for 2014.

Arnold is married to Sybil,who abandoned him in 2013.He has not seen or communicated with her since April of that year.He maintains a household in which their son,Evans,lives.Evans is age 25 and earns over $6,000 each year.For tax year 2014,Arnold's filing status is:

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 2014 is $16,000 ($12,400 + $1,200 + $1,200 + $1,200).

Regarding dependency exemptions,classify each statement in one of the four categories: -A family friend who is supported by and lives with the taxpayer.

Match the statements that relate to each other.Note: Choice L may be used more than once. -Kiddie tax does not apply

A child who has unearned income of $2,000 or less cannot 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

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basis Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters

Meg,age 23,is a full-time law student and is claimed by her parents as a dependent.During 2014,she received $1,400 interest income from a bank savings account and $6,000 from a parttime job.What is Meg's taxable income for 2014?