Deck 3: Individual Taxation--An Overview

Question 1

If a dependent died before the last day of the year, the dependency exemption may not be claimed since the status on December 31 determines entitlement to the deduction.

Answer 1

False
Death during the year does not deny the dependency exemption so long as the individual qualified as a dependent as of the date of death.

Question 2

To qualify as an abandoned spouse, the taxpayer must furnish more than half the support of a household that is the principal abode of a dependent child.

Answer 2

True

Question 3

A person who is a member of the household and lives with the taxpayer for the entire year need not be related to the taxpayer to be claimed as a dependent.

Answer 3

True

Question 4

A person who is widowed on February 1 may qualify to file a joint return for that year.

Question 5

Taxpayers are allowed to take the larger of their itemized deductions or the standard deduction.

Question 6

Mr. Ivory does not have sufficient gross income to require the filing of a tax return; however, he has $200 in income tax withheld, so he should file a return in order to collect his taxes withheld.

Question 7

A divorced parent having custody who remarries is not allowed to consider support provided by the new spouse in determining who contributed over half the support of the children from the previous marriage.

Question 8

If a child is a full-time student, an exemption may be claimed for the child regardless of the amount of student's gross income if he or she meets all the other tests for dependency.

Question 9

A taxpayer is allowed a dependency exemption for a brother for whom over half the support was paid even if the brother earned more than $3,650 while a full-time student.

Question 10

An individual who is divorced or legally separated at the end of the year may claim his former wife's exemption if he contributed over half of her support.

Question 11

The period of time for which support is furnished, not the total cost of support, is the deciding factor in determining if over 50 percent of total support is provided.

Question 12

If no one person contributes more than half the support of a dependent, the exemption may never be claimed by anyone.

Question 13

Each personal exemption for 2012 is worth $3,800.

Question 14

If husband and wife file separate returns, both must either itemize or choose the standard deduction.

Question 15

A taxpayer is allowed an additional standard deduction for a dependent grandmother who is 70 years old.

Question 16

To qualify as a student for federal income tax purposes, the child must be a full-time student for at least some part of each five calendar months of the calendar year.

Question 17

An abandoned spouse, even though filing separately, will be allowed to use the standard deduction, without regard to whether the deserter spouse itemizes.

Question 18

In determining who furnishes more than 50 percent of the total support of a child who is a full-time student, scholarships received by the child must be considered as part of his or her support.

Question 19

Funds used for support which a student borrows from a bank must be considered as part of his or her support.

Question 20

An 18-year-old child may be claimed as a dependent if the child had gross income of $3,900, provided the other dependency tests are met.

Question 21

A surviving spouse who meets certain requirements may file a joint return for the year of death, and be entitled to similar benefits for the following two years.

Question 22

In qualifying for head of household status, the cost of clothing, education, and medical treatment are considered costs of maintaining a household.

Question 23

If a spouse dies on January 17 and the taxpayer remarries on November 25 of the same year, the taxpayer may elect to file a joint return with the deceased spouse for that tax year.

Question 24

A minor's income may be included in the parents' return.

Question 25

John Jergens, a 45-year-old, is the sole support of his aged parents. His father is 72 and is in good health. His mother is 70 and is blind. What are the total exemptions that John should claim?

A) 1
B) 2
C) 3
D) 4
E) None of the above

Question 26

Which of the following individuals would most likely not qualify as a dependent?

A) Foster child
B) Stepfather
C) Housekeeper employed by taxpayer
D) Ex-wife's mother
E) All of the above could qualify

Question 27

During the year, Minerva Malcolm was entirely supported by her three sons, Alfred, Bill, and Charles, who provided support in the following percentages: Alfred 8%
Bill 45%
Charles 47%
Which of the brothers is entitled to claim his mother as a dependent, assuming a multiple support agreement exists?

A) Alfred
B) Alfred or Charles
C) Bill or Charles
D) Alfred, Bill, or Charles
E) None of the above

Question 28

Determine the amount of taxable income of Michael Manx in 2012, who is single and has $300 of wages and $2,000 of interest income for the year. He is claimed as a dependent by his parents.

A) $2,000
B) $2,300
C) $1,350
D) $300
E) $0

Question 29

What is the amount of standard deduction for Abigale Abrams in 2012, a divorced parent, who fully supports her five-year-old daughter?

A) $5,950
B) $8,700
C) $11,900
D) $7,600
E) None of the above

Question 30

Mr. and Mrs. Twig are both under 65 years of age and have no dependents. Their only income for the year was his salary of $15,500. During the year they made only a nominal amount of disbursements of the type that qualify as itemized deductions. What is their standard deduction on a 2012 joint return?

A) $3,800
B) $11,900
C) $5,950
D) $8,700
E) None of the above

Question 31

If the taxpayer is divorced by a final decree on or before the last day of the tax year, the taxpayer is considered single for the entire year.

Question 32

Marvin Miller, who is claimed as a dependent by his parents, received income of $3,100 from a trust fund and $500 from wages. Marvin had $1,050 in itemized deductions. What is Marvin's taxable income?

A) $2,650
B) $3,600
C) $2,550
D) $1,700
E) None of the above

Question 33

An unmarried taxpayer who furnishes all the cost of maintaining a home for himself or herself and an unmarried child qualifies as a head of household even though the child can not be claimed as a dependent.

Question 34

Jerry Jenkins is over 65 years of age and has no dependents. His only income was his salary of $10,500. During the year, he made only a nominal amount of disbursements of the type that qualify as itemized deductions of $3,290. What is his standard deduction for 2012?

A) $5,950
B) $3,800
C) $7,400
D) $3,290
E) None of the above

Question 35

Which of the following items are taken into consideration when determining total support for purposes of the dependency test?

A) Expenditures for recreation
B) Funeral expenses
C) Cost of new bedroom furniture
D) Life insurance premiums
E) None of the above

Question 36

A taxpayer does not qualify for the head of household tax rates if the dependent parent resides in a nursing home.

Question 37

Mr. and Mrs. Smith were both 67 years old and had no dependents. Mr. Smith died during the year. What is the maximum number of exemptions that Mrs. Smith may claim for the year?

A) 1
B) 2
C) 3
D) 4
E) None of the above

Question 38

What is Jerome Jackson's standard deduction for 2012 if he has $20,000 in wages and files married filing separately? He also claims one of the two children.

A) $5,950
B) $4,850
C) $11,900
D) $3,800
E) None of the above

Question 39

Even though a person is legally married he or she may be considered not married for tax purposes if certain conditions are met.

Question 40

An individual, age 65, with gross income of $1,000 is not required to file a federal income tax return.

Question 41

A self-employed person is subject to the self-employment tax if self- employment taxable income is at least:

A) $100
B) $400
C) $600
D) $1,000
E) None of the above

Question 42

Which of the following is not a requirement to qualify as a surviving spouse?

A) Have not remarried
B) Have a child or stepchild who qualifies as a dependent
C) Have been entitled to file a joint return with your spouse for the year of death
D) Own your home
E) Husband or wife must have died within the two preceding tax years

Question 43

Which relative does not have to live in the same household as the taxpayer claiming head of household filing status?

A) Aunt
B) Son
C) Granddaughter
D) Father
E) Brother

Question 44

How many years can surviving spouse status be claimed?

Question 45

What is the amount of self-employment tax that would be paid by Andy for the year assuming he earned $100,500 while working as an employee of the University and another $20,000 from a sales business he owns?

A) $998.40
B) $1,534.03
C) $535.63
D) $2,456.51
E) None of the above

Question 46

Nellie Fox maintains her home in which she and her daughter reside. The daughter does not qualify as Nellie's dependent. Nellie's husband died the previous year. What is Nellie's filing status for the year?

A) Single
B) Surviving spouse
C) Married filing jointly
D) Head of household
E) None of the above

Question 47

List the requirements that must be met in order to qualify as a head of household.

Question 48

Junior is a student at the local University. He is supported by his parents while going to school full time. Junior earns $2,000 from a part-time job. What is Junior's taxable income for the year?

Question 49

Which of the following is considered to be net earnings from self- employment?

A) Capital gains
B) Wages received by an employee
C) Winning lottery ticket
D) Interest income from personal savings account
E) None of the above

Question 50

Determine the self-employment tax for an individual who has $93,400 in wages, $4,000 in interest income, and
$20,000 in self-employment income.

Question 51

Mr. and Mrs. Acres were both over 65 last year before Mr. Acres died. They have no dependents. List the personal exemptions that Mrs. Acres may claim on this year's tax return.

Question 52

Max Moore is a widower (his spouse died in 2010) and maintains a separate apartment for his father. Max cannot take a dependency exemption for his father because his father's income is $4,000 per year. What is the best filing status for Max for 2012?

A) Joint return
B) Surviving spouse
C) Head of household
D) Single
E) None of the above