Question 1

What options are available for reporting and paying tax on the unearned income of a child under age 24?

Accepted Answer

The answer of What options are available for reporting and...

Question 2

Satish,age 11,is a dependent of his parents.His only source of income in 2015 is $3,000 of interest income on bonds given him by his grandparents.Satish's marginal rate is 10%,and his parent's marginal rate is 28%.Satish's tax is

Accepted Answer

A) $357. 
B) $195. 
C) $546. 
D) $300.

Question 3

Steve Greene,age 66,is divorced with no dependents.In 2015 Steve had income and expenses as follows:  Compute Steve's taxable income for 2015.Show all calculations.

Accepted Answer

The answer of Steve Greene,age 66,is divorced with no dependents.In...

Question 4

John supports Kevin,his cousin,who lived with him throughout 2015.John also supports three other individuals who do not live with him:  Assume that Donna,Melissa,Morris and Kevin each earn less than $4,000.How many personal and dependency exemptions may John claim?

Accepted Answer

A) 2 
B) 3 
C) 4 
D) 5

Question 5

Maxine,who is 76 years old and single,is appropriately claimed as a dependent on her daughter Beth's tax return.During 2015 she received $500 interest on a savings account.She had a part time job that earned $3,000.Her total itemized deductions were $1,300.
Required: Compute Maxine's taxable income for 2015.Show all calculations.

Accepted Answer

The answer of Maxine,who is 76 years old and single,is...

Question 6

In 2015,Sam is single and rents an apartment for which he pays $800 per month and makes charitable contributions of $1,000.Sam's adjusted gross income is $47,000.
Required: Compute his taxable income.Show all calculations.

Accepted Answer

The answer of In 2015,Sam is single and rents an...

Question 7

Juanita's mother lives with her.Juanita purchased clothing for her mother costing $1,000 and provided her with a room that Juanita estimates she could have rented for $4,000.Juanita spent $5,000 on groceries she shared with her mother.Juanita also paid $700 for her mother's health insurance coverage.How much of these costs is considered support?

Accepted Answer

A) $5,000 
B) $7,500 
C) $10,000 
D) $10,700

Question 8

If a 13-year-old has earned income of $500 and unearned income of $2,500,all of the income can be reported on the parent's return.

Accepted Answer

A) True 
 B)False

Question 9

In October 2014,Joy and Paul separated and have not lived with each other since,but they are still legally married.They do not file a joint return.Joy supports their children after the separation and pays the cost of maintaining their home.Joy's filing status in 2014 and 2015 is,respectively,

Accepted Answer

A) single for both years. 
B) head of household and single. 
C) married filing separately for both years. 
D) married filing separately and head of household.

Question 10

Oscar and Diane separated in June of this year although they continue to live in the same town.They have twin sons,Blake and Cliff,who remain in the family home with Diane.Oscar's income this year was $45,000 while Diane worked only part-time and made $15,000.Oscar also gambles heavily but told Diane that he had no winnings this year.What tax issues should they consider?

Accepted Answer

The answer of Oscar and Diane separated in June of...

Question 11

To qualify as an abandoned spouse,the taxpayer is not required to

Accepted Answer

A) be a U.S.citizen or resident. 
B) live apart from the spouse for the last six months of the year. 
C) pay more than half the cost of maintaining the home. 
D) have a son or daughter in the home for the entire year.

Question 12

The following information is available for Bob and Brenda Horton,a married couple filing a joint return,for 2015.Both Bob and Brenda are age 32 and have no dependents.   a.What is the amount of their gross income?
b.What is the amount of their adjusted gross income?
c.What is the amount of their taxable income?
d.What is the amount of their tax liability (gross tax)?
e.What is the amount of their tax due or (refund due)?

Accepted Answer

The answer of The following information is available for Bob...

Question 13

Tax returns from individual and corporate taxpayers are due on the 15th day of the third month following the close of the tax year.

Accepted Answer

A) True 
 B)False

Question 14

For 2015,unearned income in excess of $2,100 of a child under age 18 is generally taxed at the parents' rate.

Accepted Answer

A) True 
 B)False

Question 15

Refundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.

Accepted Answer

A) True 
 B)False

Question 16

A taxpayer can receive innocent spouse relief if

Accepted Answer

A) the understated tax is attributable to erroneous items of the other spouse. 
B) the innocent spouse did not know and had no reason to know that there was an understatement of tax. 
C) under the circumstances,it would be inequitable to hold the innocent spouse liable for the understated tax. 
D) All of the above conditions apply.

Question 17

Charlie is claimed as a dependent on his parents' tax return in 2015.He received $8,000 during the year from a part-time acting job,which was his only income.What is his standard deduction?

Accepted Answer

A) $1,050 
B) $6,300 
C) $8,000 
D) $8,350

Question 18

For purposes of the dependency exemption,a qualifying child may not provide more than one-half of his or her own support during the year.

Accepted Answer

A) True 
 B)False

Question 19

Anna is supported entirely by her three sons John,James,and Joseph who provide for her support in the following percentages:  Assuming a multiple support declaration exists,which of the brothers may claim his mother as a dependent?

Accepted Answer

A) any of the sons 
B) James or Joseph 
C) Joseph only 
D) None of them

Question 20

Which of the following credits is considered a refundable credit?

Accepted Answer

A) child and dependent care credit 
B) earned income credit 
C) adoption expense credit 
D) lifetime learning credit

Exam 4: Determination of Tax

What options are available for reporting and paying tax on the unearned income of a child under age 24?

Satish,age 11,is a dependent of his parents.His only source of income in 2015 is $3,000 of interest income on bonds given him by his grandparents.Satish's marginal rate is 10%,and his parent's marginal rate is 28%.Satish's tax is

Steve Greene,age 66,is divorced with no dependents.In 2015 Steve had income and expenses as follows: Compute Steve's taxable income for 2015.Show all calculations.

John supports Kevin,his cousin,who lived with him throughout 2015.John also supports three other individuals who do not live with him: Assume that Donna,Melissa,Morris and Kevin each earn less than $4,000.How many personal and dependency exemptions may John claim?

In 2015,Sam is single and rents an apartment for which he pays $800 per month and makes charitable contributions of $1,000.Sam's adjusted gross income is $47,000. Required: Compute his taxable income.Show all calculations.

If a 13-year-old has earned income of $500 and unearned income of $2,500,all of the income can be reported on the parent's return.

In October 2014,Joy and Paul separated and have not lived with each other since,but they are still legally married.They do not file a joint return.Joy supports their children after the separation and pays the cost of maintaining their home.Joy's filing status in 2014 and 2015 is,respectively,

To qualify as an abandoned spouse,the taxpayer is not required to

Tax returns from individual and corporate taxpayers are due on the 15th day of the third month following the close of the tax year.

For 2015,unearned income in excess of $2,100 of a child under age 18 is generally taxed at the parents' rate.

Refundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.

A taxpayer can receive innocent spouse relief if

Charlie is claimed as a dependent on his parents' tax return in 2015.He received $8,000 during the year from a part-time acting job,which was his only income.What is his standard deduction?

For purposes of the dependency exemption,a qualifying child may not provide more than one-half of his or her own support during the year.

Anna is supported entirely by her three sons John,James,and Joseph who provide for her support in the following percentages: Assuming a multiple support declaration exists,which of the brothers may claim his mother as a dependent?

Which of the following credits is considered a refundable credit?