Question 1

The character of income is a factor in determining the rate at which the income is taxed.

Accepted Answer

A) True 
 B)False

Question 2

Sheri and Jake Woodhouse have one daughter, Emma, who is 16 years old. They also have taken in Emma's friend, Harriet, who has lived with them since February of the current year and is also 16 years of age. The Woodhouses have not legally adopted Harriet but Emma often refers to Harriet as "her sister." The Woodhouses provide all of the support for both girls, and both girls live at the Woodhouse residence. Which of thefollowing statements is true regarding the dependency exemptions (and the reason for the exemptions) Sheri and Jake may claim for the current year for these girls?

Accepted Answer

A)  One exemption for Emma as a qualifying child and one exemption for Harriet as a qualifying child. 
B)  One exemption for Emma as a qualifying child and one exemption for Harriet as a qualifying relative. 
C)  One exemption for their daughter Emma as a qualifying child but no exemption for Harriet. 
D)  None of these statements is true. 
A)  One exemption for Emma as a qualifying child and one exemption for Harriet as a qualifying child. 
B)  One exemption for Emma as a qualifying child and one exemption for Harriet as a qualifying relative. 
C)  One exemption for their daughter Emma as a qualifying child but no exemption for Harriet. 
D)  None of these statements is true.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

An individual may meet the relationship test to be a taxpayer's qualifying relative even if the individual has no family relationship with the taxpayer.

Accepted Answer

A) True 
 B)False

Question 5

Jamison's gross tax liability is $7,000. Jamison had $2,000 of available credits and he had $4,000 of taxes withheld by his employer. What is Jamison's taxes due (or taxes refunded) with his tax return?

Accepted Answer

A)  $1,000 taxes due. 
B)  $1,000 tax refund. 
C)  $3,000 taxes due. 
D)  $5,000 taxes due. 
A)  $1,000 taxes due. 
B)  $1,000 tax refund. 
C)  $3,000 taxes due. 
D)  $5,000 taxes due.

Question 6

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

Accepted Answer

A)  the applicable standard deduction amount 
B)  one-half of the individual's support 
C)  the personal and dependency exemption amount 
D)  None of the choices are correct. 
A)  the applicable standard deduction amount 
B)  one-half of the individual's support 
C)  the personal and dependency exemption amount 
D)  None of the choices are correct.

Question 7

Jane and Ed Rochester are married with a two-year-old child who lives with them and whom they support financially. In 2017, Ed and Jane realized the following items of income and expense:   They also qualified for a $1,000 tax credit. Their employers withheld $1,800 in taxes from their paychecks (in the aggregate). Finally, the 2017 standard deduction amount for MFJ taxpayers is $12,700 and the 2017exemption amount is $4,050.What are the couple's taxes due or tax refund (use the tax rate schedules not tax tables)?

Accepted Answer

$1,900 tax

Question 8

Which of the following statements regarding tax credits is true?

Accepted Answer

A)  Tax credits reduce taxes payable dollar for dollar. 
B)  Tax credits provide a greater tax benefit the greater the taxpayer's marginal tax rate. 
C)  Tax credits reduce taxable income dollar for dollar. 
D)  None of these statements is true. 
A)  Tax credits reduce taxes payable dollar for dollar. 
B)  Tax credits provide a greater tax benefit the greater the taxpayer's marginal tax rate. 
C)  Tax credits reduce taxable income dollar for dollar. 
D)  None of these statements is true.

Question 9

Sullivan's wife Susan died four years ago. Sullivan has not remarried and he maintains a home for his dependent child Sammy. In 2017, Sullivan received $70,000 of salary from his employer and he paid $6,000 of itemized deductions. What is Sullivan's taxable income for 2017?

Accepted Answer

The answer of Sullivan's wife Susan died four years ago....

Question 10

When determining whether a child meets the qualifying child support test for the parents, scholarships earned by the child do not count as self-support provided by the child.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

The relationship test for qualifying relative requires the potential qualifying relative to have a family relationship with the taxpayer.

Accepted Answer

A) True 
 B)False

Question 14

If no one qualifies as the dependent of an unmarried taxpayer, the unmarried taxpayer may still be able to qualify for the head of household filing status.

Accepted Answer

A) True 
 B)False

Question 15

Anna is a qualifying child of her parents. However, she was recently married. Anna and her husband filed a joint return. If they had filed separately, Anna would have owed no taxes, though her husband would have owed just $5. Because Anna herself owed notaxes, her parents can still claim her as a dependent.

Accepted Answer

A) True 
 B)False

Question 16

It is generally more advantageous from a nontax perspective for a married couple to file separately than it is for them to file jointly.

Accepted Answer

A) True 
 B)False

Question 17

In 2017, Brittany, who is single, cares for her father Raymond. Brittany pays the bills relating to Raymond's home. She also buys groceries and provides the rest of his support. Raymond has no gross income. Brittany received $45,000 of salary from her employer during the year. Brittany reports $3,000 of itemized deductions. What is Brittany's taxable income?

Accepted Answer

$27,550 ($45,000 − $9,350 stan

Question 18

A taxpayer may qualify for the head of household filing status if she has no dependent children but pays more than half of the cost of maintaining a separate household for her dependent mother and/or father.

Accepted Answer

A) True 
 B)False

Question 19

Relative to for AGI deductions, from AGI deductions tend to relate to items that are more personal in nature.

Accepted Answer

A) True 
 B)False

Question 20

In determining filing status purposes, which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

Accepted Answer

A)  The taxpayer files a tax return separate from the other spouse. 
B)  The spouse does not live in the taxpayer's home at all during the year. 
C)  The taxpayer claims a dependency exemption for a child. 
D)  The taxpayer pays more than half the costs of maintaining his or her home for the entire year and the home is the principal residence for a dependent qualifying child for more than half the year. 
A)  The taxpayer files a tax return separate from the other spouse. 
B)  The spouse does not live in the taxpayer's home at all during the year. 
C)  The taxpayer claims a dependency exemption for a child. 
D)  The taxpayer pays more than half the costs of maintaining his or her home for the entire year and the home is the principal residence for a dependent qualifying child for more than half the year.

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

The character of income is a factor in determining the rate at which the income is taxed.

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

An individual may meet the relationship test to be a taxpayer's qualifying relative even if the individual has no family relationship with the taxpayer.

Jamison's gross tax liability is $7,000. Jamison had $2,000 of available credits and he had $4,000 of taxes withheld by his employer. What is Jamison's taxes due (or taxes refunded) with his tax return?

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

Which of the following statements regarding tax credits is true?

Sullivan's wife Susan died four years ago. Sullivan has not remarried and he maintains a home for his dependent child Sammy. In 2017, Sullivan received $70,000 of salary from his employer and he paid $6,000 of itemized deductions. What is Sullivan's taxable income for 2017?

When determining whether a child meets the qualifying child support test for the parents, scholarships earned by the child do not count as self-support provided by the child.

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

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

The relationship test for qualifying relative requires the potential qualifying relative to have a family relationship with the taxpayer.

If no one qualifies as the dependent of an unmarried taxpayer, the unmarried taxpayer may still be able to qualify for the head of household filing status.

It is generally more advantageous from a nontax perspective for a married couple to file separately than it is for them to file jointly.

A taxpayer may qualify for the head of household filing status if she has no dependent children but pays more than half of the cost of maintaining a separate household for her dependent mother and/or father.

Relative to for AGI deductions, from AGI deductions tend to relate to items that are more personal in nature.

In determining filing status purposes, which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Retirement Savings and Deferred Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The US Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters