Question 1

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 taxable income, a taxpayer must choose between the standard deduction and deductions from AGI. 
B)  In arriving at AGI, personal and dependency exemptions must be subtracted from gross income. 
C)  In arriving at taxable income, a taxpayer must choose between the standard deduction and claiming personal and dependency exemptions. 
D)  The formula does not apply if a taxpayer elects to claim the standard deduction. 
E)  None of the above. 
A)  In arriving at taxable income, a taxpayer must choose between the standard deduction and deductions from AGI. 
B)  In arriving at AGI, personal and dependency exemptions must be subtracted from gross income. 
C)  In arriving at taxable income, a taxpayer must choose between the standard deduction and claiming personal and dependency exemptions. 
D)  The formula does not apply if a taxpayer elects to claim the standard deduction. 
E)  None of the above.

Question 2

Kyle and Liza are married and under 65 years of age.During 2012,they furnish more than half of the support of their 19-year old daughter,May,who lives with them.She graduated from high school in May 2011.May earns $15,000 from a part-time job,most of which she sets aside for future college expenses.Kyle and Liza also provide more than half of the support of Kyle's cousin who lives with them.Liza's father,who died on January 3,2012,at age 90,has for many years qualified as their dependent.How many personal and dependency exemptions should Kyle and Liza 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 3

An "above the line" deduction refers to a deduction for AGI.

Accepted Answer

A) True 
 B)False

Question 4

The Hutters filed a joint return for 2012.They provide more than 50% of the support of Carla,Melvin,and Aaron.Carla (age 18)is a cousin and earns $5,000 from a part-time job.Melvin (age 25)is their son and is a full-time law student.He received from the university a $3,800 scholarship for tuition.Aaron is a brother who is a citizen of Israel but resides in France.Carla and Melvin live with the Hutters.How many personal and dependency exemptions can the Hutters claim on their Federal income tax return?

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 5

A child who has unearned income of $1,900 or less cannot be subject to the kiddie tax.

Accepted Answer

A) True 
 B)False

Question 6

An increase in a taxpayer's AGI will increase the amount of medical expenses that can be deducted.

Accepted Answer

A) True 
 B)False

Question 7

Sylvia,age 17,is claimed by her parents as a dependent.During 2012,she had interest income from a bank savings account of $2,000 and income from a part-time job of $4,200.Sylvia's taxable income is:

Accepted Answer

A)  $4,200 - $4,500 = $0. 
B)  $6,200 - $5,700 = $500. 
C)  $6,200 - $4,500 = $1,700. 
D)  $6,200 - $950 = $5,250. 
E)  None of the above. 
A)  $4,200 - $4,500 = $0. 
B)  $6,200 - $5,700 = $500. 
C)  $6,200 - $4,500 = $1,700. 
D)  $6,200 - $950 = $5,250. 
E)  None of the above.

Question 8

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. 
E)  None of the above. 
A)  State and local sales taxes. 
B)  Interest on home mortgage. 
C)  Charitable contributions. 
D)  Unreimbursed moving expenses of an employee. 
E)  None of the above.

Question 9

Currently,the top income tax rate in effect is not the highest it has ever been.

Accepted Answer

A) True 
 B)False

Question 10

Under the income tax formula,a taxpayer must choose between deductions from AGI and the standard deduction.

Accepted Answer

A) True 
 B)False

Question 11

Howard,age 82,dies on January 2,2012.On Howard's final income tax return,the full amount of the basic and additional standard deductions will be allowed even though Howard lived for only 2 days during the year.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

During 2012,Addison has the following gains and losses:

Accepted Answer

The answer of During 2012,Addison has the following gains and...

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

An "above the line" deduction refers to a deduction for AGI.

A child who has unearned income of $1,900 or less cannot be subject to the kiddie tax.

An increase in a taxpayer's AGI will increase the amount of medical expenses that can be deducted.

Sylvia,age 17,is claimed by her parents as a dependent.During 2012,she had interest income from a bank savings account of $2,000 and income from a part-time job of $4,200.Sylvia's taxable income is:

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

Currently,the top income tax rate in effect is not the highest it has ever been.

Under the income tax formula,a taxpayer must choose between deductions from AGI and the standard deduction.

Howard,age 82,dies on January 2,2012.On Howard's final income tax return,the full amount of the basic and additional standard deductions will be allowed even though Howard lived for only 2 days during the year.

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

During 2012,Addison has the following gains and losses:

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

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

An "above the line" deduction refers to a deduction for AGI.

A child who has unearned income of $1,900 or less cannot be subject to the kiddie tax.

An increase in a taxpayer's AGI will increase the amount of medical expenses that can be deducted.

Sylvia,age 17,is claimed by her parents as a dependent.During 2012,she had interest income from a bank savings account of $2,000 and income from a part-time job of $4,200.Sylvia's taxable income is:

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

Currently,the top income tax rate in effect is not the highest it has ever been.

Under the income tax formula,a taxpayer must choose between deductions from AGI and the standard deduction.

Howard,age 82,dies on January 2,2012.On Howard's final income tax return,the full amount of the basic and additional standard deductions will be allowed even though Howard lived for only 2 days during the year.

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

During 2012,Addison has the following gains and losses:

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