Question 1

During 2019, Marvin had the following transactions:   Salary $50,000 Bank loan (proceeds used to buy personal auto)  10,000 Alimony paid (divorce was finalized in 2010) . 12,000 Child support paid 6,000 Gift from aunt 20,000\begin{array} { l r } 	ext { Salary } & \$ 50,000 \	ext { Bank loan (proceeds used to buy personal auto)  } & 10,000 \	ext { Alimony paid (divorce was finalized in 2010) . } & 12,000 \	ext { Child support paid } & 6,000 \	ext { Gift from aunt } & 20,000\end{array} Salary  Bank loan (proceeds used to buy personal auto)   Alimony paid (divorce was finalized in 2010) .  Child support paid  Gift from aunt ​$50,00010,00012,0006,00020,000​  Marvin's AGI is:

Accepted Answer

A)  $32,000.
B)  $38,000.
C)  $44,000.
D)  $56,000.
E)  $64,000. F) D) and E)
G) C) and E)

Question 2

In January 2019, Jake's wife dies and he does not remarry.For tax year 2019, Jake may not be able to use the filing status available to married persons filing joint returns.

Accepted Answer

A) True 
 B)False

Question 3

Which of the statements regarding the standard deduction, if any, 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.F) None of the above
G) All of the above

Question 4

During 2019, Lisa (age 66)  furnished more than 50% of the support of the following persons: 
? Her current husband who has no income and is not claimed by anyone else as a dependent.
? Her stepson (age 19)  who lives with her and earns $6,000 as a dance instructor.He dropped out of school a year ago.
? Her ex-husband who does not live with her.The divorce occurred two years ago.
? Her former brother-in-law who does not live with her.
Presuming that all other dependency tests are met, on a separate return how many dependents may Lisa claim?

Accepted Answer

A)  Two
B)  Three
C)  Four
D)  Five
E)  None of theseF) A) and B)
G) A) and C)

Question 5

Match the statements that relate to each other.Note: Some choices may be used more than once.
-Scholarship funds for room and board

Accepted Answer

A)  Not available to 65-year old taxpayer who itemizes.
B)  Exception for U.S.citizenship or residency test (for dependency exemption purposes) .
C)  Largest basic standard deduction available to a dependent who has no earned income in 2019.
D)  Considered for dependency purposes.
E)  Qualifies for head of household filing status.F) A child (age 15)  who is a dependent and has only earned income.G) Considered in applying gross income test (for dependency exemption purposes) .H) Not considered in applying the gross income test (for dependency exemption purposes) .I) Unmarried taxpayer who can use the same tax rates as married persons filing jointly.J) Exception to the support test (for dependency exemption purposes) .K) A child (age 16)  who is a dependent and has only unearned income of $4,500.L) No correct match provided.M) C) and I)
N) F) and G)

Question 6

The filing status of a taxpayer (e.g., single, head of household) must be identified before the applicable standard deduction is determined.

Accepted Answer

A) True 
 B)False

Question 7

An individual taxpayer uses a fiscal year of March 1 to February 28.The due date of this taxpayer's Federal income tax return is May 15 of each tax year.

Accepted Answer

A) True 
 B)False

Question 8

The kiddie tax does not apply to a child whose earned income is more than one-half of his or her support.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live.Crissa, age 22, earns $11,000 during 2019 as a model.Katelyn does not qualify for head of household filing status.

Accepted Answer

A) True 
 B)False

Question 11

Match the statements that relate to each other.Note: Choice k.may be used more than once.
-Relationship test (for dependency exemption purposes)

Accepted Answer

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.L) F) and K)
M) I) and J)

Question 12

In determining whether the gross income test is met for determining dependency status, only the taxable portion of a scholarship is considered.

Accepted Answer

A) True 
 B)False

Question 13

A child who is married cannot be subject to the kiddie tax.

Accepted Answer

A) True 
 B)False

Question 14

In 2019, Hal furnishes more than half of the support of his ex-wife and her father, both of whom live with him.The divorce occurred in 2018.Hal may claim the father-in-law and the ex-wife as dependents.

Accepted Answer

A) True 
 B)False

Question 15

Perry, a single taxpayer, has taxable income of $178,000 and is in the 32% tax bracket.During 2019, he had the following capital asset transactions:   Gain from the sale of a stamp collection (held for 10 years)  $30,000 Gain from the sale of an investment in land (held for 4 years)  10,000 Gain from the sale of stock investment (held for 8 months)  4,000\begin{array}{lr}	ext { Gain from the sale of a stamp collection (held for } 10 	ext { years)  } & \$ 30,000 \	ext { Gain from the sale of an investment in land (held for } 4 	ext { years)  } & 10,000 \	ext { Gain from the sale of stock investment (held for } 8 	ext { months)  } & 4,000\end{array} Gain from the sale of a stamp collection (held for 10 years)   Gain from the sale of an investment in land (held for 4 years)   Gain from the sale of stock investment (held for 8 months)  ​$30,00010,0004,000​  Perry's tax consequences from these gains are as follows:

Accepted Answer

A)  (15% × $30,000)  + (32% × $4,000) .
B)  (15% × $10,000)  + (28% × $30,000)  + (32% × $4,000) .
C)  (0% × $10,000)  + (28% × $30,000)  + (32% × $4,000) .
D)  (15% × $40,000)  + (32% × $4,000) .
E)  None of these. F) A) and E)
G) B) and C)

Question 16

Matching 
Regarding classification as a dependent, classify each statement in one of the four categories:
-A nephew who lives with taxpayer.

Accepted Answer

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.E) C) and D)
F) B) and C)

Question 17

In terms of the tax formula applicable to individual taxpayers, which of the following statements, if any, is correct?

Accepted Answer

A)  In arriving at AGI, a taxpayer must elect between claiming deductions for AGI and deductions from AGI.
B)  In arriving at taxable income, a taxpayer must elect between claiming deductions for AGI and deductions from AGI.
C)  If a taxpayer has deductions for AGI, the standard deduction is not available.
D)  In arriving at taxable income, a taxpayer must elect between deductions for AGI and the standard deduction.
E)  None of these.F) B) and E)
G) A) and E)

Question 18

Many taxpayers who previously itemized will start claiming the standard deduction when they purchase a home.

Accepted Answer

A) True 
 B)False

Question 19

Match the statements that relate to each other.Note: Some choices may be used more than once.
-Kiddie tax applies

Accepted Answer

A)  Not available to 65-year old taxpayer who itemizes.
B)  Exception for U.S.citizenship or residency test (for dependency exemption purposes) .
C)  Largest basic standard deduction available to a dependent who has no earned income in 2019.
D)  Considered for dependency purposes.
E)  Qualifies for head of household filing status.F) A child (age 15)  who is a dependent and has only earned income.G) Considered in applying gross income test (for dependency exemption purposes) .H) Not considered in applying the gross income test (for dependency exemption purposes) .I) Unmarried taxpayer who can use the same tax rates as married persons filing jointly.J) Exception to the support test (for dependency exemption purposes) .K) A child (age 16)  who is a dependent and has only unearned income of $4,500.L) No correct match provided.M) D) and I)
N) A) and C)

Question 20

Jason and Peg are married and file a joint return.Both are over 65 years of age and Jason is blind.Their standard deduction for 2019 is $28,300 ($24,400 + $1,300 + $1,300 + $1,300).

Accepted Answer

A) True 
 B)False

Exam 3: Tax Formula and Tax Determination an Overview of Property Transactions

A child who is married cannot be subject to the kiddie tax.

Correct Answer
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Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live.Crissa, age 22, earns $11,000 during 2019 as a model.Katelyn does not qualify for head of household filing status.

Correct Answer
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Match the statements that relate to each other.Note: Some choices may be used more than once. -Kiddie tax applies

Correct Answer
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In 2019, Hal furnishes more than half of the support of his ex-wife and her father, both of whom live with him.The divorce occurred in 2018.Hal may claim the father-in-law and the ex-wife as dependents.

Correct Answer
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Many taxpayers who previously itemized will start claiming the standard deduction when they purchase a home.

Correct Answer
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Correct Answer
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Jason and Peg are married and file a joint return.Both are over 65 years of age and Jason is blind.Their standard deduction for 2019 is $28,300 ($24,400 + $1,300 + $1,300 + $1,300).

Correct Answer
verified

An individual taxpayer uses a fiscal year of March 1 to February 28.The due date of this taxpayer's Federal income tax return is May 15 of each tax year.

Correct Answer
verified

In terms of the tax formula applicable to individual taxpayers, which of the following statements, if any, is correct?

Correct Answer
verified

The kiddie tax does not apply to a child whose earned income is more than one-half of his or her support.

Correct Answer
verified

Matching Regarding classification as a dependent, classify each statement in one of the four categories: -A nephew who lives with taxpayer.

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

Correct Answer
verified

Match the statements that relate to each other.Note: Some choices may be used more than once. -Scholarship funds for room and board

Correct Answer
verified

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

Correct Answer
verified

In determining whether the gross income test is met for determining dependency status, only the taxable portion of a scholarship is considered.

Correct Answer
verified

Match the statements that relate to each other.Note: Choice k.may be used more than once. -Relationship test (for dependency exemption purposes)

Correct Answer
verified

In January 2019, Jake's wife dies and he does not remarry.For tax year 2019, Jake may not be able to use the filing status available to married persons filing joint returns.

Correct Answer
verified

The filing status of a taxpayer (e.g., single, head of household) must be identified before the applicable standard deduction is determined.

Correct Answer
verified

Exam 3: Tax Formula and Tax Determination an Overview of Property Transactions

A child who is married cannot be subject to the kiddie tax.

Correct AnswerverifiedShow Answer

Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live.Crissa, age 22, earns $11,000 during 2019 as a model.Katelyn does not qualify for head of household filing status.

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.Note: Some choices may be used more than once. -Kiddie tax applies

Correct AnswerverifiedShow Answer

In 2019, Hal furnishes more than half of the support of his ex-wife and her father, both of whom live with him.The divorce occurred in 2018.Hal may claim the father-in-law and the ex-wife as dependents.

Correct AnswerverifiedShow Answer

Many taxpayers who previously itemized will start claiming the standard deduction when they purchase a home.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Jason and Peg are married and file a joint return.Both are over 65 years of age and Jason is blind.Their standard deduction for 2019 is $28,300 ($24,400 + $1,300 + $1,300 + $1,300).

Correct AnswerverifiedShow Answer

An individual taxpayer uses a fiscal year of March 1 to February 28.The due date of this taxpayer's Federal income tax return is May 15 of each tax year.

Correct AnswerverifiedShow Answer

In terms of the tax formula applicable to individual taxpayers, which of the following statements, if any, is correct?

Correct AnswerverifiedShow Answer

The kiddie tax does not apply to a child whose earned income is more than one-half of his or her support.

Correct AnswerverifiedShow Answer

Matching Regarding classification as a dependent, classify each statement in one of the four categories: -A nephew who lives with taxpayer.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.Note: Some choices may be used more than once. -Scholarship funds for room and board

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

In determining whether the gross income test is met for determining dependency status, only the taxable portion of a scholarship is considered.

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.Note: Choice k.may be used more than once. -Relationship test (for dependency exemption purposes)

Correct AnswerverifiedShow Answer

In January 2019, Jake's wife dies and he does not remarry.For tax year 2019, Jake may not be able to use the filing status available to married persons filing joint returns.

Correct AnswerverifiedShow Answer

The filing status of a taxpayer (e.g., single, head of household) must be identified before the applicable standard deduction is determined.

Correct AnswerverifiedShow Answer

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