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After her divorce,Hope continues to support her ex­husband's sister,Cindy,who does not live with her.Hope can claim Cindy as a dependent.

A) True
B) False

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Under what circumstances,if any,may an ex-spouse be claimed as a dependent?

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As an ex­spouse does not meet the relationship test,he or she must be a member of the taxpayer's household.The association cannot be in violation of local law and the year involved cannot be the year of the divorce.

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


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.
D) Considered for dependency exemption 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) F) and J)

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Regarding dependency exemptions,classify each statement in one of the four categories: -A half-brother who lives with taxpayer.


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) None of the above
F) A) and D)

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As opposed to itemizing deductions from AGI,the majority of individual taxpayers choose the standard deduction.

A) True
B) False

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Under the Federal income tax formula for individuals,the determination of adjusted gross income (AGI)precedes that of taxable income (TI).

A) True
B) False

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For 2014,Stuart has a short-term capital loss,a collectible long-term capital gain,and a long-term capital gain from land held as investment.The short-term loss is first applied to the collectible capital gain.

A) True
B) False

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


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.
D) Considered for dependency exemption 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) F) and L)
N) C) and D)

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Ellen,age 39 and single,furnishes more than 50% of the support of her parents,who do not live with her.Ellen practices as a self-employed interior decorator and has gross income in 2014 of $120,000.Her deductions are as follows: $30,000 business and $8,100 itemized. a.What is Ellen's taxable income for 2014? b.Can Ellen qualify for head of household filing status? Explain.

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a.$69,050.$120,000 (gross income)- $30,0...

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

A) True
B) False

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True

During 2014,Esther had the following transactions:  Salary $70,000 Interest income on Xerox bonds 2,000 Inheritance from uncle 40,000 Contribution to traditional IRA 5,500 Capital losses 2,500 Esther’s AGI is: \begin{array}{lr}\text { Salary } & \$ 70,000 \\\text { Interest income on Xerox bonds } & 2,000 \\\text { Inheritance from uncle } & 40,000 \\\text { Contribution to traditional IRA } & 5,500 \\\text { Capital losses } & 2,500\\\text { Esther's } A G I \text { is: }\end{array}


A) $62,000.\$ 62,000 .
B)  $64.000. \text { \$64.000. }
C) $67,000.\$ 67,000 .
D) $102,000\$ 102,000
E) $104.000. \text {\$104.000. }

F) A) and B)
G) C) and E)

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During 2014,Sarah had the following transactions: During 2014,Sarah had the following transactions: A) \$185,000 B) \$ 187,000 C) \$ 285,000 D) \$ 287,000 . E) \text { \$87,000. }


A) $185,000\$185,000
B) $187,000\$ 187,000
C) $285,000\$ 285,000
D) $287,000.\$ 287,000 .
E)  $87,000. \text { \$87,000. }

F) A) and D)
G) D) and E)

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Regarding the tax formula and its relationship to Form 1040,which,if any,of the following statements is correct?


A) Most exclusions from gross income are reported on page 2 of Form 1040.
B) An "above the line deduction" refers to a deduction from AGI.
C) A "page 1 deduction" refers to a deduction for AGI.
D) The taxable income (TI) amount appears both at the bottom of page 1 and at the top of page 2 of Form 1040.
E) None of these.

F) A) and B)
G) A) and C)

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A dependent cannot claim a personal exemption on his or her own return.

A) True
B) False

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Regarding dependency exemptions,classify each statement in one of the four categories: -A cousin who does not live with taxpayer.


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) A) and C)
F) B) and D)

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When can a taxpayer not use Form 1040EZ? Form 1040A?

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Form 1040EZ cannot be used when the taxp...

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Match the statements that relate to each other.Note: Choice L may be used more than once. -Scholarship funds for tuition


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.
D) Considered for dependency exemption 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 E)
N) D) and L)

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Match the statements that relate to each other.Note: Choice L may be used more than once. -Abandoned spouse


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.
D) Considered for dependency exemption 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) B) and G)
N) G) and H)

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

A) True
B) False

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True

Match the statements that relate to each other.Note: Choice L may be used more than once. -Long-term capital gains


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 ex­husband does not qualify.
G) A dependent child (age 18) who has only unearned income.
H) Highest applicable rate is 39.6%.
I) Applicable rate could be as low as 0%.
J) Maximum rate is 28%.
K) Income from foreign sources is not subject to tax.
L) No correct match provided.

M) H) and K)
N) A) and F)

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