Question 1

Married taxpayers who file separately cannot later (i.e.,after the due date for filing) change to a joint return.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

The answer of Regarding dependency exemptions, classify each statement in...

Question 3

The Martins have a teenage son who has become an accomplished bagpiper.With proper promotion and scheduling,the son has good income potential by charging for his services at special events (particularly funerals).However,the Martins are fearful that the income could generate a kiddie tax and cause them the loss of a dependency exemption deduction.Are the Martins' concerns justified? Explain.

Accepted Answer

The income received by the son would be

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

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 always 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 always 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 6

Match the statements that relate to each other. Note: Some choices may be used more than once.
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.
-Age of a qualifying child

Accepted Answer

The answer of Match the statements that relate to each...

Question 7

In 2017,Ed is 66 and single.If he has itemized deductions of $7,400,he should not claim the standard deduction alternative.

Accepted Answer

A) True 
 B)False

Question 8

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 9

A decrease in a taxpayer's AGI could increase the amount of medical expenses that can be deducted.

Accepted Answer

A) True 
 B)False

Question 10

Once they reach age 65,many taxpayers will switch from itemizing their deductions from AGI and start claiming the standard deduction.

Accepted Answer

A) True 
 B)False

Question 11

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

Question 12

In 2017,Tom is single and has AGI of $50,000.He is age 70,has no dependents,and has itemized deductions (i.e.,from AGI) of $7,000.Determine Tom's taxable income for 2017.

Accepted Answer

$38,050.Tom's standard deduction is $6,3

Question 13

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

Accepted Answer

"Above the line" means before

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

Since an abandoned spouse is treated as not married 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 16

Emily,whose husband died in December 2016,maintains a household in which her dependent mother lives.Which (if any) of the following is her filing status for the tax year 2017? (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 17

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

Accepted Answer

The answer of Regarding dependency exemptions, classify each statement in...

Question 18

After Ellie moves out of the apartment she had rented as her personal residence,she recovers her damage deposit of $1,000.The $1,000 is not income to Ellie.

Accepted Answer

A) True 
 B)False

Question 19

Match the statements that relate to each other.
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 ex-husband 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.
-Marginal income tax rate

Accepted Answer

The answer of Match the statements that relate to each...

Question 20

Lucas,age 17 and single,earns $6,000 during 2017.Lucas's parents cannot claim him as a dependent if he does not live with them.

Accepted Answer

A) True 
 B)False

Exam 3: Computing the Tax

Married taxpayers who file separately cannot later (i.e.,after the due date for filing) change to a joint return.

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

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

In 2017,Ed is 66 and single.If he has itemized deductions of $7,400,he should not claim the standard deduction alternative.

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

A decrease in a taxpayer's AGI could increase the amount of medical expenses that can be deducted.

Once they reach age 65,many taxpayers will switch from itemizing their deductions from AGI and start claiming the standard deduction.

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

In 2017,Tom is single and has AGI of $50,000.He is age 70,has no dependents,and has itemized deductions (i.e.,from AGI) of $7,000.Determine Tom's taxable income for 2017.

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

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

Since an abandoned spouse is treated as not married and has one or more dependent children,he or she qualifies for the standard deduction available to head of household.

Emily,whose husband died in December 2016,maintains a household in which her dependent mother lives.Which (if any) of the following is her filing status for the tax year 2017? (Note: Emily is the executor of her husband's estate.)

After Ellie moves out of the apartment she had rented as her personal residence,she recovers her damage deposit of $1,000.The $1,000 is not income to Ellie.

Lucas,age 17 and single,earns $6,000 during 2017.Lucas's parents cannot claim him as a dependent if he does not live with them.

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

Property Transactions, capital Gains and Losses, sec1231, and 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 Reorganization

Partnerships

S Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters