Question 1

Claude's deductions from AGI exceed the standard deduction allowed for the current year. Under these circumstances, Claude cannot claim the standard deduction.

Accepted Answer

A) True 
 B)False

Question 2

Because they appear on page 1 of Form 1040, itemized deductions are also referred to as "page 1 deductions."

Accepted Answer

A) True 
 B)False

Question 3

Kim, a resident of Oregon, supports his parents who are residents of Canada but citizens of Korea. Kim can claim a dependent tax credit for his parents.

Accepted Answer

A) True 
 B)False

Question 4

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

Accepted Answer

A) True 
 B)False

Question 5

Which, if any, of the statements regarding the standard deduction is correct?

Accepted Answer

A)  Some taxpayers may qualify for two types of standard deductions. 
B)  The standard deduction is not available to taxpayers who are dependents. 
C)  The standard deduction may be taken as a for AGI deduction. 
D)  The basic standard deduction is indexed for inflation but the additional standard deduction is not. 
E)  None of these.

Question 6

Lena is 66 years of age, single, and blind and is not claimed as a dependent. How much gross income must she have before she is required to file a Federal income tax return for 2018?

Accepted Answer

The answer of Lena is 66 years of age, single,...

Question 7

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 8

The major advantage of being classified as an abandoned spouse is that the taxpayer is treated for tax purposes as being single and not married. This means that an abandoned spouse can use the more favorable tax rates available to single persons than those available to married persons filing separately. Comment on the accuracy of this conclusion.

Accepted Answer

The answer of The major advantage of being classified as...

Question 9

Which of the following taxpayers may file as a head of household in 2018? Marco provides all the support for his mother, Sienna, who lives by herself in an apartment in Fort Lauderdale. Marco pays the rent and other expenses for the apartment and properly claims his mother as a dependent.
Tammy provides over one-half the support for her 18-year old brother, Dan. Dan earned $4,200 in 2018 working at a fast food restaurant and is saving his money to attend college in 2019. Dan lives in Tammy's home.
Juan's wife left him late in December of 2017. No legal action was taken and Juan has not heard from her in 2018. Juan supported his 6-year-old son, who lived with him throughout 2018.

Accepted Answer

A)  Marco only 
B)  Tammy only 
C)  Juan only 
D)  Marco and Juan only 
E)  Marco, Tammy, and Juan

Question 10

Regarding classification as a dependent, 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 son lives with taxpayer and earns $3,000.

Accepted Answer

The answer of Regarding classification as a dependent, classify each...

Question 11

Regarding classification as a dependent, 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 granddaughter, who lives with taxpayer, is 19 years old, earns $5,000, and is not a full-time student.

Accepted Answer

The answer of Regarding classification as a dependent, classify each...

Question 12

Monique is a resident of the U.S. and a citizen of France. If she files a U.S. income tax return, Monique cannot claim the standard deduction.

Accepted Answer

A) True 
 B)False

Question 13

Dan and Donna are husband and wife and file separate returns for the year. If Dan itemizes his deductions from AGI, Donna cannot claim the standard deduction.

Accepted Answer

A) True 
 B)False

Question 14

In 2018, Ashley earns a salary of $55,000, has capital gains of $3,000, and receives interest income of $5,000. Her husband died in 2017. Ashley has a dependent son, Tyrone, who is age 8. Her itemized deductions are $9,000.
a. What is her filing status?
b. Calculate Ashley's taxable income for 2018.

Accepted Answer

The answer of In 2018, Ashley earns a salary of...

Question 15

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 16

Hannah, age 70 and single, is claimed as a dependent by her daughter. During 2018, she had interest income of $2,550 and $800 of earned income from babysitting. Hannah's taxable income is:

Accepted Answer

A)  $700. 
B)  $900. 
C)  $2,250. 
D)  $2,550. 
E)  None of these.

Question 17

In 2018, a child who has unearned income of $2,100 or less cannot be subject to the kiddie tax.

Accepted Answer

A) True 
 B)False

Question 18

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 19

Married taxpayers who file a joint return cannot later (i.e., after the filing due date) switch to separate returns for that year.

Accepted Answer

A) True 
 B)False

Question 20

Match the statements that relate to each other. Note: Choice l. may be used more than once.
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 37%.
i. Applicable rate could be as low as 0%. 
j. Maximum rate is 28%.
k. No correct match provided.
-Marginal income tax rate

Accepted Answer

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

Exam 3: Computing the Tax

Claude's deductions from AGI exceed the standard deduction allowed for the current year. Under these circumstances, Claude cannot claim the standard deduction.

Because they appear on page 1 of Form 1040, itemized deductions are also referred to as "page 1 deductions."

Kim, a resident of Oregon, supports his parents who are residents of Canada but citizens of Korea. Kim can claim a dependent tax credit for his parents.

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

Which, if any, of the statements regarding the standard deduction is correct?

Lena is 66 years of age, single, and blind and is not claimed as a dependent. How much gross income must she have before she is required to file a Federal income tax return for 2018?

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.

Monique is a resident of the U.S. and a citizen of France. If she files a U.S. income tax return, Monique cannot claim the standard deduction.

Dan and Donna are husband and wife and file separate returns for the year. If Dan itemizes his deductions from AGI, Donna cannot claim the standard deduction.

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.

Hannah, age 70 and single, is claimed as a dependent by her daughter. During 2018, she had interest income of $2,550 and $800 of earned income from babysitting. Hannah's taxable income is:

In 2018, a child who has unearned income of $2,100 or less cannot be subject to the kiddie tax.

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

Married taxpayers who file a joint return cannot later (i.e., after the filing due date) switch to separate returns for that year.