Question 1

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

Accepted Answer

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

Question 2

Tad claims his 70-year-old mother as a dependent.The mother may not claim an additional standard deduction for her age.

Accepted Answer

A) True 
 B)False

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Merle,age 17,is claimed by her parents as a dependent.During 2010,she had interest income from a bank savings account of $2,000 and income from a part-time job of $4,200.Merle'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 5

Ed is divorced and maintains a home in which he and a dependent friend live.Ed qualifies for head of household filing status.

Accepted Answer

A) True 
 B)False

Question 6

Perry is in the 33% tax bracket.During 2010,he had the following capital asset transactions:   Perry's tax consequences from these gains are as follows:

Accepted Answer

A) (15% * $10,000)+ (28% * $30,000)+ (33% * $4,000). 
B) (15% * $30,000)+ (33% * $4,000). 
C) (0% * $10,000)+ (28% * $30,000)+ (33% * $4,000). 
D) (15% * $40,000)+ (33% * $4,000). 
E) None of the above. 
A) (15% * $10,000)+ (28% * $30,000)+ (33% * $4,000). 
B) (15% * $30,000)+ (33% * $4,000). 
C) (0% * $10,000)+ (28% * $30,000)+ (33% * $4,000). 
D) (15% * $40,000)+ (33% * $4,000). 
E) None of the above.

Question 7

The IRS facilitates the filing of income tax returns by persons in the U.S.illegally through the issuance of ITINs.

Accepted Answer

A) True 
 B)False

Question 8

For the current year,David has salary income of $80,000 and the following property transactions:   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 the above. 
A) $76,000. 
B) $77,000. 
C) $78,000. 
D) $89,000. 
E) None of the above.

Question 9

Using borrowed funds from a mortgage on her home,Leah provides 52% of her own support,while her sons furnished the rest.Leah can be claimed as a dependent under a multiple support agreement.

Accepted Answer

A) True 
 B)False

Question 10

After her divorce,Hope continues to support her ex-husband's sister,Cindy,who does not live with her.Hope cannot claim Cindy as a dependent.

Accepted Answer

A) True 
 B)False

Question 11

Gene is single and for 2010 has AGI of $40,000.He is age 65 and has no dependents.For 2010,he has itemized deductions from AGI of $7,000.Determine Gene's taxable income for 2010.

Accepted Answer

$29,250.Gene's standard deductions are $

Question 12

Derek,age 46,is a surviving spouse.If he has itemized deductions of $11,600 for 2010,Derek should not claim the standard deduction.

Accepted Answer

A) True 
 B)False

Question 13

Pablo is married to Elena,who lives with him.Both are U.S.citizens and residents of Kansas.Pablo furnishes all of the support of his parents,who are citizens of Nicaragua and residents of Mexico.He also furnishes all of the support of Elena's parents,who are citizens and residents of Nicaragua.Elena has no gross income for the year.If Pablo files as a married person filing separately,how many personal and dependency exemptions can he claim on his return?

Accepted Answer

Four.A personal exemption for Pablo and

Question 14

Contrast the tax consequences resulting from the following filing status situations:

Accepted Answer

The answer of Contrast the tax consequences resulting from the...

Question 15

In order to claim a dependency exemption for other than a qualifying child,a taxpayer must meet the support test.Generally,this is done by furnishing more than 50% of a dependent's support.What exceptions exist,if any,where the support furnished need not be more than 50%?

Accepted Answer

One exception involves the multiple supp

Question 16

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 17

Nelda is married to Chad,who abandoned her in early June of 2010.She has not seen or communicated with him since then.She maintains a household in which she and her two dependent children live.Which of the following statements about Nelda's filing status in 2010 is correct?

Accepted Answer

A) Nelda can use the rates for single taxpayers. 
B) Nelda can file a joint return with Chad. 
C) Nelda can file as a surviving spouse. 
D) Nelda can file as a head of household. 
E) None of the above statements is appropriate. 
A) Nelda can use the rates for single taxpayers. 
B) Nelda can file a joint return with Chad. 
C) Nelda can file as a surviving spouse. 
D) Nelda can file as a head of household. 
E) None of the above statements is appropriate.

Question 18

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

Accepted Answer

A) Alimony payments. 
B) Child support payments. 
C) Funeral expenses. 
D) Loss on the sale of a personal residence. 
E) Interest on home mortgage. 
A) Alimony payments. 
B) Child support payments. 
C) Funeral expenses. 
D) Loss on the sale of a personal residence. 
E) Interest on home mortgage.

Question 19

A taxpayer who itemizes his deductions from AGI can claim the property taxes on his personal residence as a deduction.

Accepted Answer

A) True 
 B)False

Question 20

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

Exam 3: Computing the Tax

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

Tad claims his 70-year-old mother as a dependent.The mother may not claim an additional standard deduction for her age.

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

Merle,age 17,is claimed by her parents as a dependent.During 2010,she had interest income from a bank savings account of $2,000 and income from a part-time job of $4,200.Merle's taxable income is:

Ed is divorced and maintains a home in which he and a dependent friend live.Ed qualifies for head of household filing status.

Perry is in the 33% tax bracket.During 2010,he had the following capital asset transactions: Perry's tax consequences from these gains are as follows:

The IRS facilitates the filing of income tax returns by persons in the U.S.illegally through the issuance of ITINs.

For the current year,David has salary income of $80,000 and the following property transactions: What is David's AGI for the current year?

Using borrowed funds from a mortgage on her home,Leah provides 52% of her own support,while her sons furnished the rest.Leah can be claimed as a dependent under a multiple support agreement.

After her divorce,Hope continues to support her ex-husband's sister,Cindy,who does not live with her.Hope cannot claim Cindy as a dependent.

Gene is single and for 2010 has AGI of $40,000.He is age 65 and has no dependents.For 2010,he has itemized deductions from AGI of $7,000.Determine Gene's taxable income for 2010.

Derek,age 46,is a surviving spouse.If he has itemized deductions of $11,600 for 2010,Derek should not claim the standard deduction.

Contrast the tax consequences resulting from the following filing status situations:

In order to claim a dependency exemption for other than a qualifying child,a taxpayer must meet the support test.Generally,this is done by furnishing more than 50% of a dependent's support.What exceptions exist,if any,where the support furnished need not be more than 50%?

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

Nelda is married to Chad,who abandoned her in early June of 2010.She has not seen or communicated with him since then.She maintains a household in which she and her two dependent children live.Which of the following statements about Nelda's filing status in 2010 is correct?

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

A taxpayer who itemizes his deductions from AGI can claim the property taxes on his personal residence as a deduction.

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

Part 1--Property Transactions: Determination of Gain or Loss,basis Considerations,and Nontaxable Exchanges

Part 2--Property Transactions: Determination of Gain or Loss,basis Considerations,and Nontaxable Exchanges

Property Transactions: Capital Gains and Losses,1231,and Recapure Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

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

The Federal Gift and Estate Taxes

Income Taxation of Trusts and Estates

Filters