Question 1

Carolyn lives in New York and supports her niece who is a Canadian citizen that resides in Quebec,Canada.Carolyn may claim her niece as a dependent.

Accepted Answer

A) True 
 B)False

Question 2

In satisfying the support test and the gross income test for claiming a dependency exemption,a scholarship received by the person being claimed is handled the same way for each test.Do you agree or disagree with this statement? Why?

Accepted Answer

Disagree.For purposes of the s

Question 3

In determining whether the support test is met for dependency exemption purposes,only the taxable portion of a scholarship is considered.

Accepted Answer

A) True 
 B)False

Question 4

Which,if any,of the following statements relating to the standard deduction is correct?

Accepted Answer

A) If a taxpayer dies during the year,his (or her)standard deduction must be prorated. 
B) If spouses file separate returns,both spouses must claim the standard deduction (rather than itemize their deductions from AGI). 
C) If a taxpayer is claimed as a dependent of another,his (or her)additional standard deduction is allowed in full (i.e. ,no adjustment is necessary). 
D) If a taxpayer is claimed as a dependent of another,no basic standard deduction is allowed. 
E) None of the above. 
A) If a taxpayer dies during the year,his (or her)standard deduction must be prorated. 
B) If spouses file separate returns,both spouses must claim the standard deduction (rather than itemize their deductions from AGI). 
C) If a taxpayer is claimed as a dependent of another,his (or her)additional standard deduction is allowed in full (i.e. ,no adjustment is necessary). 
D) If a taxpayer is claimed as a dependent of another,no basic standard deduction is allowed. 
E) None of the above.

Question 5

Meg,age 23,is a full-time law student and is claimed by her parents as a dependent.During 2010,she received $1,400 interest income from a bank savings account and $5,600 from a part-time job.What is Meg's taxable income for 2010?

Accepted Answer

$1,300.Meg's standard deduction is the g

Question 6

For the qualifying relative rule (for dependency exemption purposes):

Accepted Answer

A) The dependent must be under age 19 or a full-time student under age 24. 
B) The dependent need not reside with the taxpayer claiming the exemption. 
C) The dependent must be related to the taxpayer claiming the exemption. 
D) The dependent must be a citizen or resident of the U.S. 
E) None of the above. 
A) The dependent must be under age 19 or a full-time student under age 24. 
B) The dependent need not reside with the taxpayer claiming the exemption. 
C) The dependent must be related to the taxpayer claiming the exemption. 
D) The dependent must be a citizen or resident of the U.S. 
E) None of the above.

Question 7

During 2010,Justin had the following transactions:   Justin's AGI is:

Accepted Answer

A) $185,000. 
B) $187,000. 
C) $285,000. 
D) $287,000. 
E) $385,000. 
A) $185,000. 
B) $187,000. 
C) $285,000. 
D) $287,000. 
E) $385,000.

Question 8

Surviving spouse filing status begins in the year in which the deceased spouse died.

Accepted Answer

A) True 
 B)False

Question 9

Kyle and Liza are married and under 65 years of age.During 2010,they furnish more than half of the support of their 19-year old daughter,May,who lives with them.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 3,2010,at age 80,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 10

During 2010,Jen (age 66)furnished more than 50% of the support of the following persons:   Presuming all other dependency tests are met,on a separate return how many personal and dependency exemptions may Jen 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 11

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 12

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

Accepted Answer

A) True 
 B)False

Question 13

Keith,age 17 and single,earns $4,000 during 2010.Keith's parents can claim him as a dependent even if he does not live with them.

Accepted Answer

A) True 
 B)False

Question 14

Gain on the sale of collectibles held for more than 12 months is subject to tax at a rate no higher than 28%.

Accepted Answer

A) True 
 B)False

Question 15

During the year,Kim sold the following assets: business auto for a $1,000 loss,stock investment for a $1,000 loss,and pleasure yacht for a $1,000 loss.Presuming adequate income,how much of these losses may Kim claim?

Accepted Answer

A) $0. 
B) $1,000. 
C) $2,000. 
D) $3,000. 
E) None of the above. 
A) $0. 
B) $1,000. 
C) $2,000. 
D) $3,000. 
E) None of the above.

Question 16

Dan and Donna are husband and wife and file separate returns for the year.Even if Dan itemizes his deductions from AGI,Donna can still claim the standard deduction.

Accepted Answer

A) True 
 B)False

Question 17

Emily,whose husband died in December 2010,maintains a household in which her dependent daughter lives.Which (if any)of the following is her filing status for the tax year 2010? (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 18

In some cases,the tax on long-term capital gains can be as low as 0%.

Accepted Answer

A) True 
 B)False

Question 19

Kirby is in the 15% tax bracket and had the following capital asset transactions during 2010:   Kirby's tax consequences from these gains are as follows:

Accepted Answer

A) (5% * $10,000)+ (15% * $13,000). 
B) (0% * $10,000)+ (15% * $13,000). 
C) (15% * $13,000)+ (28% * $11,000). 
D) (15% * $23,000). 
E) None of the above. 
A) (5% * $10,000)+ (15% * $13,000). 
B) (0% * $10,000)+ (15% * $13,000). 
C) (15% * $13,000)+ (28% * $11,000). 
D) (15% * $23,000). 
E) None of the above.

Question 20

Karen had the following transactions for 2010:
   What is Karen's AGI for 2010?

Accepted Answer

$83,000.$90,000 (salary)+ $1,000 (raffle

Exam 3: Computing the Tax

Carolyn lives in New York and supports her niece who is a Canadian citizen that resides in Quebec,Canada.Carolyn may claim her niece as a dependent.

In satisfying the support test and the gross income test for claiming a dependency exemption,a scholarship received by the person being claimed is handled the same way for each test.Do you agree or disagree with this statement? Why?

In determining whether the support test is met for dependency exemption purposes,only the taxable portion of a scholarship is considered.

Which,if any,of the following statements relating to the standard deduction is correct?

Meg,age 23,is a full-time law student and is claimed by her parents as a dependent.During 2010,she received $1,400 interest income from a bank savings account and $5,600 from a part-time job.What is Meg's taxable income for 2010?

For the qualifying relative rule (for dependency exemption purposes):

During 2010,Justin had the following transactions: Justin's AGI is:

Surviving spouse filing status begins in the year in which the deceased spouse died.

During 2010,Jen (age 66)furnished more than 50% of the support of the following persons: Presuming all other dependency tests are met,on a separate return how many personal and dependency exemptions may Jen claim?

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

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

Keith,age 17 and single,earns $4,000 during 2010.Keith's parents can claim him as a dependent even if he does not live with them.

Gain on the sale of collectibles held for more than 12 months is subject to tax at a rate no higher than 28%.

During the year,Kim sold the following assets: business auto for a $1,000 loss,stock investment for a $1,000 loss,and pleasure yacht for a $1,000 loss.Presuming adequate income,how much of these losses may Kim claim?

Dan and Donna are husband and wife and file separate returns for the year.Even if Dan itemizes his deductions from AGI,Donna can still claim the standard deduction.

Emily,whose husband died in December 2010,maintains a household in which her dependent daughter lives.Which (if any)of the following is her filing status for the tax year 2010? (Note: Emily is the executor of her husband's estate. )

In some cases,the tax on long-term capital gains can be as low as 0%.

Kirby is in the 15% tax bracket and had the following capital asset transactions during 2010: Kirby's tax consequences from these gains are as follows:

Karen had the following transactions for 2010: What is Karen's AGI for 2010?

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