Question 1

All of the following are tests for determining qualifying child status except the ________.

Accepted Answer

A)  gross income test 
B)  age test 
C)  support test 
D)  residence test 
A)  gross income test 
B)  age test 
C)  support test 
D)  residence test

Question 2

For purposes of determining filing status, which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

Accepted Answer

A)  The taxpayer claims a child as a dependent. 
B)  The taxpayer pays more than half the costs of maintaining his or her home for the entire year and the home is the principal residence for a dependent qualifying child for more than half the year. 
C)  The taxpayer files a tax return separate from the other spouse. 
D)  The spouse does not live in the taxpayer's home at all during the year. 
A)  The taxpayer claims a child as a dependent. 
B)  The taxpayer pays more than half the costs of maintaining his or her home for the entire year and the home is the principal residence for a dependent qualifying child for more than half the year. 
C)  The taxpayer files a tax return separate from the other spouse. 
D)  The spouse does not live in the taxpayer's home at all during the year.

Question 3

A taxpayer who is claimed as a dependent on another's tax return may not claim any dependents on his or her tax return.

Accepted Answer

A) True 
 B)False

Question 4

Which of the following statements regarding realized income is true?

Accepted Answer

A)  Taxpayers need not include realized income in gross income unless a specific provision of the tax code requires them to do so. 
B)  Realized income requires some type of transaction or exchange with a second party. 
C)  Once income is realized it may not be excluded from gross income. 
D)  None of these statements is true. 
A)  Taxpayers need not include realized income in gross income unless a specific provision of the tax code requires them to do so. 
B)  Realized income requires some type of transaction or exchange with a second party. 
C)  Once income is realized it may not be excluded from gross income. 
D)  None of these statements is true.

Question 5

Jan is unmarried and has no children, but she provides all of the financial support for her mother, who lives in an apartment across town. Jan's mother qualifies as Jan's dependent. Which is the most advantageous filing status available to Jan?

Accepted Answer

A)  Single. 
B)  Head of household. 
C)  Qualifying individual. 
D)  Surviving single. 
A)  Single. 
B)  Head of household. 
C)  Qualifying individual. 
D)  Surviving single.

Question 6

Which of the following types of income are not considered ordinary income?

Accepted Answer

A)  Compensation income. 
B)  Net long-term capital gains (in excess of short-term capital losses). 
C)  Qualified dividend income. 
D)  Both compensation income and qualified dividend income. 
E)  Both net long-term capital gains (in excess of short-term capital losses) and qualified dividend income. 
A)  Compensation income. 
B)  Net long-term capital gains (in excess of short-term capital losses). 
C)  Qualified dividend income. 
D)  Both compensation income and qualified dividend income. 
E)  Both net long-term capital gains (in excess of short-term capital losses) and qualified dividend income.

Question 7

Bonnie and Ernie file a joint return. Bonnie works and receives income during the year but Ernie does not. If the couple files a joint tax return, Ernie is responsible for paying any taxes due if Bonnie is unable to pay the taxes.

Accepted Answer

A) True 
 B)False

Question 8

Jasmine and her husband Arty have been married for 25 years. In May of this year, the couple divorced. During the year, Jasmine provided all the support for herself and her 22-year-old child Dexter who lived in the same home as Jasmine for the entire year. Dexter is employed full-time, earning $29,000 this year. What is the Jasmine's most favorable filing status for the year?

Accepted Answer

A)  Single. 
B)  Married filing separately. 
C)  Surviving spouse. 
D)  Head of household. 
A)  Single. 
B)  Married filing separately. 
C)  Surviving spouse. 
D)  Head of household.

Question 9

In June of year 1, Eric's wife Savannah died. Eric did not remarry during year 1, year 2, or year 3. Eric maintains the household for his dependent daughter Catherine in year 1, year 2, and year 3. Which is the most advantageous filing status for Eric in year 2?

Accepted Answer

A)  Head of household. 
B)  Qualifying widower. 
C)  Single. 
D)  Married filing separately. 
A)  Head of household. 
B)  Qualifying widower. 
C)  Single. 
D)  Married filing separately.

Question 10

Which of the following statements is true?

Accepted Answer

A)  Income character determines the tax year in which the income is taxed. 
B)  Income character depends on the taxpayer's filing status. 
C)  Qualified dividend income is taxed at a lower rate than an equal amount of ordinary income. 
D)  A taxpayer selling a capital asset at a gain recognizes ordinary income. 
A)  Income character determines the tax year in which the income is taxed. 
B)  Income character depends on the taxpayer's filing status. 
C)  Qualified dividend income is taxed at a lower rate than an equal amount of ordinary income. 
D)  A taxpayer selling a capital asset at a gain recognizes ordinary income.

Question 11

If an unmarried taxpayer is eligible to claim another as a dependent, the taxpayer is automatically eligible for the head of household filing status.

Accepted Answer

A) True 
 B)False

Question 12

Jane and Ed Rochester are married with a two-year-old child who lives with them and whom they support financially. In 2018, Ed and Jane realized the following items of income and expense:
   They also qualified for a $2,000 child tax credit. Their employers withheld $5,800 in federal income taxes from their paychecks (in the aggregate). Finally, the 2018 standard deduction amount for MFJ taxpayers is $24,000.
What is the couple's gross income?

Accepted Answer

$106,000,

Question 13

The standard deduction amount for married filing separately taxpayers (MFS) is less than the standard deduction amount for married filing jointly taxpayers.

Accepted Answer

A) True 
 B)False

Question 14

The relationship test for qualifying relative requires the potential qualifying relative to have a family relationship with the taxpayer.

Accepted Answer

A) True 
 B)False

Question 15

An individual receiving $5,000 of tax exempt income during the year could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.

Accepted Answer

A) True 
 B)False

Question 16

Itemized deductions and the standard deduction are deductions from AGI but the deduction for qualified business income is a deduction for AGI.

Accepted Answer

A) True 
 B)False

Question 17

Jennifer and Stephan are married at year-end and they file separate tax returns. If Jennifer itemizes deductions on her return, Stephan must also itemize deductions on his return even if his itemized deductions don't exceed his standard deduction.

Accepted Answer

A) True 
 B)False

Question 18

Beginning in 2018, taxpayers are allowed to deduct dependency exemptions but they are not allowed to deduct personal exemptions.

Accepted Answer

A) True 
 B)False

Question 19

An individual may be considered as a qualifying child of her parents and a qualifying child of her grandparents in the same year.

Accepted Answer

A) True 
 B)False

Question 20

It is generally more advantageous from a tax perspective for a married couple to file separately than it is for them to file jointly.

Accepted Answer

A) True 
 B)False

Exam 4: Individual Income Tax Overview, Dependents, and Filing Status

All of the following are tests for determining qualifying child status except the ________.

For purposes of determining filing status, which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

A taxpayer who is claimed as a dependent on another's tax return may not claim any dependents on his or her tax return.

Which of the following statements regarding realized income is true?

Jan is unmarried and has no children, but she provides all of the financial support for her mother, who lives in an apartment across town. Jan's mother qualifies as Jan's dependent. Which is the most advantageous filing status available to Jan?

Which of the following types of income are not considered ordinary income?

Bonnie and Ernie file a joint return. Bonnie works and receives income during the year but Ernie does not. If the couple files a joint tax return, Ernie is responsible for paying any taxes due if Bonnie is unable to pay the taxes.

In June of year 1, Eric's wife Savannah died. Eric did not remarry during year 1, year 2, or year 3. Eric maintains the household for his dependent daughter Catherine in year 1, year 2, and year 3. Which is the most advantageous filing status for Eric in year 2?

Which of the following statements is true?

If an unmarried taxpayer is eligible to claim another as a dependent, the taxpayer is automatically eligible for the head of household filing status.

The standard deduction amount for married filing separately taxpayers (MFS) is less than the standard deduction amount for married filing jointly taxpayers.

The relationship test for qualifying relative requires the potential qualifying relative to have a family relationship with the taxpayer.

An individual receiving $5,000 of tax exempt income during the year could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.

Itemized deductions and the standard deduction are deductions from AGI but the deduction for qualified business income is a deduction for AGI.

Jennifer and Stephan are married at year-end and they file separate tax returns. If Jennifer itemizes deductions on her return, Stephan must also itemize deductions on his return even if his itemized deductions don't exceed his standard deduction.

Beginning in 2018, taxpayers are allowed to deduct dependency exemptions but they are not allowed to deduct personal exemptions.

An individual may be considered as a qualifying child of her parents and a qualifying child of her grandparents in the same year.

It is generally more advantageous from a tax perspective for a married couple to file separately than it is for them to file jointly.

An Introduction to Tax

Tax Compliance, the IRS, and Tax Authorities

Tax Planning Strategies and Related Limitations

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The Us Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters