Question 1

Nelda is married to Chad, who abandoned her in early June of 2014. She has not seen or communicated with him since then. She maintains a household in which she and her two dependent children live. Which of the following statements about Nelda's filing status in 2014 is correct?

Accepted Answer

A)   Nelda can use the rates for single taxpayers.
B)   Nelda can file a joint return with Chad.
C)   Nelda can file as a surviving spouse.
D)   Nelda can file as a head of household.
E)   None of the above statements is appropriate.F) B) and C)
G) C) and D)

Question 2

In terms of income tax consequences, abandoned spouses are treated the same way as married persons filing separate returns.

Accepted Answer

A) True 
 B)False

Question 3

In 2014, 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 2013. Hal may claim the father-in-law and the ex-wife as dependents.

Accepted Answer

A) True 
 B)False

Question 4

Ed is divorced and maintains a home in which he and a dependent friend live. Ed does not qualify for head of household filing status.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Which, if any, of the following is a deduction for AGI?

Accepted Answer

A)   Contributions to a traditional Individual Retirement Account.
B)   Child support payments.
C)   Funeral expenses.
D)   Loss on the sale of a personal residence.
E)   Medical expenses.F) C) and D)
G) All of the above

Question 7

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

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 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) E) and H)
N) A) and K)

Question 8

A qualifying child cannot include:

Accepted Answer

A)   A nonresident alien.
B)   A married son who files a joint return.
C)   A daughter who is away at college.
D)   A brother who is 28 years of age and disabled.
E)   A grandmother.F) C) and D)
G) A) and B)

Question 9

Benjamin, age 16, is claimed as a dependent by his parents. During 2014, he earned $700 at a car wash.
Benjamin's standard deduction is $1,350 ($1,000 + $350).

Accepted Answer

A) True 
 B)False

Question 10

Regarding head of household filing status, comment on the following:
a. A taxpayer qualifies even though he maintains a household which he and the dependent do not share.
b. A taxpayer does not qualify even though the person sharing the household is a dependent.
c. The usual eventual filing status of a surviving spouse.

Accepted Answer

a. If the household is that of a depende...

Question 11

Which, if any, of the following statements relating to the standard deduction is correct?

Accepted Answer

A)   If a taxpayer dies during the year, his (or her)  standard deduction must be prorated.
B)   If a taxpayer is claimed as a dependent of another, his (or her)  additional standard deduction is allowed in full (i.e., no adjustment is necessary) .
C)   If spouses file separate returns, both spouses must claim the standard deduction (rather than itemize their deductions from AGI) .
D)   If a taxpayer is claimed as a dependent of another, no basic standard deduction is allowed.
E)   None of the above.F) A) and D)
G) None of the above

Question 12

Regarding dependency exemptions, classify each statement in one of the four categories:
-A half brother 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) A) and B)

Question 13

The Hutters filed a joint return for 2014. They provide more than 50% of the support of Carla, Melvin, and Aaron. Carla (age 18)  is a cousin and earns $2,800 from a part-time job. Melvin (age 25)  is their son and is a full-time law student. He received from the university a $3,800 scholarship for tuition. Aaron is a brother who is a citizen of Israel but resides in France. Carla and Melvin live with the Hutters. How many personal and dependency exemptions can the Hutters claim on their Federal income tax return?

Accepted Answer

A)   Two.
B)   Three.
C)   Four.
D)   Five.
E)   None of the above.F) C) and E)
G) A) and B)

Question 14

Which of the following characteristics correctly describes the procedure for the phaseout of exemptions?

Accepted Answer

A)   The threshold amounts are different and depend on filing status (e.g., joint return, single) .
B)   The threshold amounts are indexed for inflation each year.
C)   The phaseout procedure is known as a "stealth tax."
D)   For the phaseout procedure to be applied, a taxpayer's AGI must exceed the threshold amount.
E)   All of the above.F) None of the above
G) A) and E)

Question 15

Under the Federal income tax formula for individuals, a choice must be made between claiming deductions for AGI and itemized deductions.

Accepted Answer

A) True 
 B)False

Question 16

The Martins have a teenage son who has become an accomplished bagpiper. With proper promotion and scheduling, the son has good income potential by charging for his services at special events (particularly funerals). However, the Martins are fearful that the income could generate a kiddie tax and cause them the loss of a dependency exemption deduction. Are the Martins' concerns justified? Explain.

Accepted Answer

The income received by the son would be ...

Question 17

Match the statements that relate to each other. Note: Choice L 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 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) D) and K)
N) A) and G)

Question 18

Deductions for AGI are often referred to as "above­the­line" or "page 1" deductions. Explain.

Accepted Answer

"Above the line" means before ...

Question 19

For 2014, Tom has taxable income of $48,005. When he uses the Tax Tables, Tom finds that his tax liability is higher than under the Tax Rate Schedules.
a. Why is there a difference?
b. Can Tom use the Tax Rate Schedules?

Accepted Answer

a. Even though the Tax Tables are based ...

Question 20

Tony, age 15, is claimed as a dependent by his grandmother. During 2014, Tony had interest income from Boeing Corporation bonds of $1,000 and earnings from a part­time job of $700. Tony's taxable income is:

Accepted Answer

A)   $1,700.
B)   $1,700 - $700 - $1,000 = $0.
C)   $1,700 - $1,050 = $650.
D)   $1,700 - $1,000 = $700.
E)   None of the above.F) C) and D)
G) C) and E)

Exam 3: Computing the Tax

Nelda is married to Chad, who abandoned her in early June of 2014. She has not seen or communicated with him since then. She maintains a household in which she and her two dependent children live. Which of the following statements about Nelda's filing status in 2014 is correct?

Correct Answer
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Tony, age 15, is claimed as a dependent by his grandmother. During 2014, Tony had interest income from Boeing Corporation bonds of $1,000 and earnings from a parttime job of $700. Tony's taxable income is:

Correct Answer
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Match the statements that relate to each other. Note: Choice L may be used more than once. -Multiple support agreement

Correct Answer
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Deductions for AGI are often referred to as "abovetheline" or "page 1" deductions. Explain.

Correct Answer
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"Above the line" means before ...
View Answer

Benjamin, age 16, is claimed as a dependent by his parents. During 2014, he earned $700 at a car wash. Benjamin's standard deduction is $1,350 ($1,000 + $350).

Correct Answer
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Ed is divorced and maintains a home in which he and a dependent friend live. Ed does not qualify for head of household filing status.

Correct Answer
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For 2014, Tom has taxable income of $48,005. When he uses the Tax Tables, Tom finds that his tax liability is higher than under the Tax Rate Schedules. a. Why is there a difference? b. Can Tom use the Tax Rate Schedules?

Correct Answer
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a. Even though the Tax Tables are based ...
View Answer

A qualifying child cannot include:

Correct Answer
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Which of the following characteristics correctly describes the procedure for the phaseout of exemptions?

Correct Answer
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Under the Federal income tax formula for individuals, a choice must be made between claiming deductions for AGI and itemized deductions.

Correct Answer
verified

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.

Correct Answer
verified

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

Correct Answer
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Which, if any, of the following is a deduction for AGI?

Correct Answer
verified

In 2014, 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 2013. Hal may claim the father-in-law and the ex-wife as dependents.

Correct Answer
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Correct Answer
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Correct Answer
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a. If the household is that of a depende...
View Answer

Which, if any, of the following statements relating to the standard deduction is correct?

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

Correct Answer
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Correct Answer
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The income received by the son would be ...
View Answer

In terms of income tax consequences, abandoned spouses are treated the same way as married persons filing separate returns.

Correct Answer
verified

Exam 3: Computing the Tax

Nelda is married to Chad, who abandoned her in early June of 2014. She has not seen or communicated with him since then. She maintains a household in which she and her two dependent children live. Which of the following statements about Nelda's filing status in 2014 is correct?

Correct AnswerverifiedShow Answer

Tony, age 15, is claimed as a dependent by his grandmother. During 2014, Tony had interest income from Boeing Corporation bonds of $1,000 and earnings from a part­time job of $700. Tony's taxable income is:

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Deductions for AGI are often referred to as "above­the­line" or "page 1" deductions. Explain.

Correct Answerverified"Above the line" means before ...View AnswerShow Answer

Benjamin, age 16, is claimed as a dependent by his parents. During 2014, he earned $700 at a car wash. Benjamin's standard deduction is $1,350 ($1,000 + $350).

Correct AnswerverifiedShow Answer

Ed is divorced and maintains a home in which he and a dependent friend live. Ed does not qualify for head of household filing status.

Correct AnswerverifiedShow Answer

For 2014, Tom has taxable income of $48,005. When he uses the Tax Tables, Tom finds that his tax liability is higher than under the Tax Rate Schedules. a. Why is there a difference? b. Can Tom use the Tax Rate Schedules?

Correct Answerverifieda. Even though the Tax Tables are based ...View AnswerShow Answer

A qualifying child cannot include:

Correct AnswerverifiedShow Answer

Which of the following characteristics correctly describes the procedure for the phaseout of exemptions?

Correct AnswerverifiedShow Answer

Under the Federal income tax formula for individuals, a choice must be made between claiming deductions for AGI and itemized deductions.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which, if any, of the following is a deduction for AGI?

Correct AnswerverifiedShow Answer

In 2014, 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 2013. Hal may claim the father-in-law and the ex-wife as dependents.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answerverifieda. If the household is that of a depende...View AnswerShow Answer

Which, if any, of the following statements relating to the standard deduction is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedThe income received by the son would be ...View AnswerShow Answer

In terms of income tax consequences, abandoned spouses are treated the same way as married persons filing separate returns.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Tony, age 15, is claimed as a dependent by his grandmother. During 2014, Tony had interest income from Boeing Corporation bonds of $1,000 and earnings from a parttime job of $700. Tony's taxable income is:

Correct Answer
verified

Correct Answer
verified

Deductions for AGI are often referred to as "abovetheline" or "page 1" deductions. Explain.

Correct Answer
verified
"Above the line" means before ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
a. Even though the Tax Tables are based ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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a. If the household is that of a depende...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
The income received by the son would be ...
View Answer

Correct Answer
verified