Exam 4: Individual Income Tax Overview,dependents,and Filing Status

If an unmarried taxpayer is eligible to claim another as a dependent,the taxpayer is automatically eligible for the head of household filing status.

A personal automobile is a capital asset.

Certain types of income are taxed at a lower rate than ordinary income.

Which of the following statements regarding the difference between the requirements for a qualifying child and the requirements for a qualifying relative is false?

For purposes of the qualifying child residence test,a child's temporary absence from the taxpayer's home to attend school full time is counted as though the child lived in the taxpayer's home during the absence.

In June of Year 1,Jake's wife,Darla,died.The couple did not have any children and Jake did not remarry in Year 1 or Year 2.Which is the most favorable filing status for Jake in Year 2?

Filing status determines all of the following except ________.

From AGI deductions are commonly referred to as deductions "below the line."

Which of the following statements regarding realized income is true?

Which of the following statements about a qualifying person for head of household filing status is true?

Charles,who is single,pays all of the costs of maintaining a home for himself and Damarcus.Charles and Damarcus have no family relationship but Damarcus lives with Charles for the entire year.Damarcus qualifies as a qualifying relative of Charles.(Charles claims Damarcus as a dependent on his tax return.)Charles qualifies for head of household filing status.

Which of the following series of inequalities is generally most accurate?

In order to be a qualifying relative of another,an individual's gross income must be less than ________.

In April of Year 1,Martin left his wife,Marianne.While the couple was apart,they were not legally divorced.Marianne found herself having to financially provide for the couple's only child (who qualifies as Marianne's dependent)and to pay all the costs of maintaining the household.When Marianne filed her tax return for Year 1,she filed a return separate from Martin.What is Marianne's most favorable filing status for Year 1?

In April of Year 1,Martin left his wife,Marianne.The couple has two children under the age of 15.While the couple was apart,they were not legally divorced.Marianne remained in the home and paid all the costs of maintaining the home for the remainder of the year.Assuming the couple does not file jointly,which of the following statements regarding filing status is true?

Qualified dividends are taxed at the same rate as ordinary income.

Doug and Lisa have determined that their tax liability on their joint return is $3,700.They have made prepayments of $1,000 and also are entitled to a $2,000 child tax credit.What is the amount of their tax refund or taxes due?

Taxpayers need not include an income item in gross income unless there is a specific tax provision requiring the taxpayer to include the income item in gross income.

Earl and Lawanda Jackson have been married for 15 years.They have no children.Ned,who is an old friend from high school,has been living with the Jacksons during the current year.Which of the following is a true statement regarding whether the Jacksons can claim Ned as a dependent for the current year?

The test for qualifying child includes an age restriction but the test for qualifying relative does not.