Question 1

Albert buys his mother a TV.For purposes of meeting the support test,Albert cannot include the cost of the TV.

Accepted Answer

A) True 
 B)False  False

Question 2

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  True

Question 3

Emma had the following transactions for 2012:
   What is Emma's AGI for 2012?

Accepted Answer

$158,000.$80,000 (salary)+ $4,000 (alimony received)+ $70,000 (punitive damage award)+ $4,000 (short-term capital gain on the sale of stock investment).The personal injury recovery and the gift from Emma's parents are exclusions from gross income.The loss from the sale of the boat is personal and,therefore,nondeductible.The short-term capital gain on the sale of the ADM stock is taxed in full as ordinary income.

Question 4

Ellen,age 12,lives in the same household with her father,grandfather,and uncle.The cost of maintaining the household is provided by her grandfather (40%)and her uncle (60%).Disregarding tie-breaker rules,Ellen is a qualifying child as to:

Accepted Answer

A)  Only her father. 
B)  Only her grandfather and uncle. 
C)  Only her uncle. 
D)  All parties involved (i.e., father, grandfather, and uncle). 
E)  None of the above. 
A)  Only her father. 
B)  Only her grandfather and uncle. 
C)  Only her uncle. 
D)  All parties involved (i.e., father, grandfather, and uncle). 
E)  None of the above.

Question 5

Monique is a resident of the U.S.and a citizen of France.If she files a U.S.income tax return,Monique can claim the standard deduction.

Accepted Answer

A) True 
 B)False

Question 6

Which of the following taxpayers may file as a head of household in 2012? Ron provides all the support for his mother,Betty,who lives by herself in an apartment in Fort Lauderdale.Ron pays the rent and other expenses for the apartment and properly claims his mother as a dependent.
Tammy provides over one-half the support for her 18-year old brother,Dan.Dan earned $4,200 in 2012 working at a fast food restaurant and is saving his money to attend college in 2013.Dan lives in Tammy's home.
Joe's wife left him late in December of 2011.No legal action was taken and Joe has not heard from her in 2012.Joe supported his 6-year-old son,who lived with him throughout 2012.

Accepted Answer

A)  Ron only. 
B)  Tammy only. 
C)  Joe only. 
D)  Ron and Joe only. 
E)  Ron, Tammy, and Joe. 
A)  Ron only. 
B)  Tammy only. 
C)  Joe only. 
D)  Ron and Joe only. 
E)  Ron, Tammy, and Joe.

Question 7

Since an abandoned spouse is treated as single and has one or more dependent children,he or she qualifies for the standard deduction available to head of household.

Accepted Answer

A) True 
 B)False

Question 8

In applying the gross income test in the case of dependents that are married,could the application of community property laws have any effect? Explain.

Accepted Answer

Most often,the application of community

Question 9

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 10

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 11

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

Accepted Answer

A) True 
 B)False

Question 12

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 $1,900 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 the above. 
A)  The child is married but does not file a joint return. 
B)  The child has unearned income of $1,900 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 the above.

Question 13

After Carolyn moves out of the apartment she had rented as her personal residence,she recovers her damage deposit of $500.The $500 is income to Carolyn.

Accepted Answer

A) True 
 B)False

Question 14

Adjusted gross income (AGI)sets the ceiling or the floor for certain deductions.Explain and illustrate what this statement means.

Accepted Answer

By a ceiling what is meant is that the d

Question 15

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 16

Maude's parents live in another state and she cannot claim them as her dependents.If Maude pays their medical expenses,can she derive any tax benefit from doing so? Explain.

Accepted Answer

If Maude could otherwise claim

Question 17

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 18

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 capital...

Question 19

An individual taxpayer uses a fiscal year March 1-February 28.The due date of this taxpayer's Federal income tax return is May 15 of each tax year.

Accepted Answer

A) True 
 B)False

Question 20

During 2012,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.

Albert buys his mother a TV.For purposes of meeting the support test,Albert cannot include the cost of the TV.

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.

Emma had the following transactions for 2012: What is Emma's AGI for 2012?

Ellen,age 12,lives in the same household with her father,grandfather,and uncle.The cost of maintaining the household is provided by her grandfather (40%)and her uncle (60%).Disregarding tie-breaker rules,Ellen is a qualifying child as to:

Monique is a resident of the U.S.and a citizen of France.If she files a U.S.income tax return,Monique can claim the standard deduction.

Since an abandoned spouse is treated as single and has one or more dependent children,he or she qualifies for the standard deduction available to head of household.

In applying the gross income test in the case of dependents that are married,could the application of community property laws have any effect? Explain.

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

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.

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

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

After Carolyn moves out of the apartment she had rented as her personal residence,she recovers her damage deposit of $500.The $500 is income to Carolyn.

Adjusted gross income (AGI)sets the ceiling or the floor for certain deductions.Explain and illustrate what this statement means.

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

Maude's parents live in another state and she cannot claim them as her dependents.If Maude pays their medical expenses,can she derive any tax benefit from doing so? Explain.

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).

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.

An individual taxpayer uses a fiscal year March 1-February 28.The due date of this taxpayer's Federal income tax return is May 15 of each tax year.

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

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: Section 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

Albert buys his mother a TV.For purposes of meeting the support test,Albert cannot include the cost of the TV.

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.

Emma had the following transactions for 2012: What is Emma's AGI for 2012?

Ellen,age 12,lives in the same household with her father,grandfather,and uncle.The cost of maintaining the household is provided by her grandfather (40%)and her uncle (60%).Disregarding tie-breaker rules,Ellen is a qualifying child as to:

Monique is a resident of the U.S.and a citizen of France.If she files a U.S.income tax return,Monique can claim the standard deduction.

Since an abandoned spouse is treated as single and has one or more dependent children,he or she qualifies for the standard deduction available to head of household.

In applying the gross income test in the case of dependents that are married,could the application of community property laws have any effect? Explain.

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

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.

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

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

After Carolyn moves out of the apartment she had rented as her personal residence,she recovers her damage deposit of $500.The $500 is income to Carolyn.

Adjusted gross income (AGI)sets the ceiling or the floor for certain deductions.Explain and illustrate what this statement means.

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

Maude's parents live in another state and she cannot claim them as her dependents.If Maude pays their medical expenses,can she derive any tax benefit from doing so? Explain.

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).

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.

An individual taxpayer uses a fiscal year March 1-February 28.The due date of this taxpayer's Federal income tax return is May 15 of each tax year.

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

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: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Deferred Compensation

Corporations and Partnerships

Filters