Question 1

The test for a qualifying child includes a gross income restriction while the test for qualifying relative does not.

Accepted Answer

A) True 
 B)False

Question 2

A personal automobile is a capital asset.

Accepted Answer

A) True 
 B)False

Question 3

Char and Russ Dasrup have one daughter, Siera, who is 16 years old. In November oflast year, the Dasrup's took in Siera's 16 year old friend, Angela, who has lived with them ever since. The Dasrup's have not legally adopted Angela but Siera often refers to Angela as "her sister." In the current year, the Dasrups provide all of the support for both girls, neither girl receives any income during the year, and both girls live at the Dasrup'sresidence. Which of the following statements is true regarding the dependencyexemptions (and the reason for the exemptions) Char and Russ may claim for the current year for these girls?

Accepted Answer

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

Question 4

Which of the following statements regarding exclusions and/or deferrals is false?

Accepted Answer

A)  Deferrals are income items taxpayers realize in one year but include in gross income in a subsequent year. 
B)  Exclusions are favorable because taxpayers never pay tax on income that is excluded. 
C)  Interest income from municipal bonds is excluded from gross income. 
D)  An income item need not be realized in order to qualify as an exclusion item. 
A)  Deferrals are income items taxpayers realize in one year but include in gross income in a subsequent year. 
B)  Exclusions are favorable because taxpayers never pay tax on income that is excluded. 
C)  Interest income from municipal bonds is excluded from gross income. 
D)  An income item need not be realized in order to qualify as an exclusion item.

Question 5

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 areturn separate from Martin. What is Marianne's most favorable filing status for year 1?

Accepted Answer

A)  Head of household. 
B)  Married filing separately. 
C)  Single. 
D)  Qualifying widow. 
A)  Head of household. 
B)  Married filing separately. 
C)  Single. 
D)  Qualifying widow.

Question 6

In June of year 1, Edgar's wife Cathy died and Edgar did not remarry during the year.What is his filing status for year 1 (assuming they did not have any dependents)?

Accepted Answer

A)  Single. 
B)  Qualifying widower. 
C)  Head of household. 
D)  Married filing jointly. 
A)  Single. 
B)  Qualifying widower. 
C)  Head of household. 
D)  Married filing jointly.

Question 7

In year 1, Harold Weston's wife died. Since her death, he has maintained a household for their son Frank (age 3), his qualifying child. Which is the most advantageous filing status available to Harold in year 4?

Accepted Answer

A)  Surviving spouse. 
B)  Qualifying widower. 
C)  Head of household. 
D)  Married filing joint. 
A)  Surviving spouse. 
B)  Qualifying widower. 
C)  Head of household. 
D)  Married filing joint.

Question 8

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

Accepted Answer

A)  Qualifying children are subject to age restrictions while qualifying relatives are not. 
B)  Qualifying relatives are subject to a gross income restriction while qualifying children are not. 
C)  The relationship requirement is more broadly defined (more inclusive) for qualifying relatives than for qualifying children. 
D)  The support test for qualifying relatives focuses on the support the potential dependent self-provides while the support test for qualifying children focuses on the support the taxpayer provides. 
A)  Qualifying children are subject to age restrictions while qualifying relatives are not. 
B)  Qualifying relatives are subject to a gross income restriction while qualifying children are not. 
C)  The relationship requirement is more broadly defined (more inclusive) for qualifying relatives than for qualifying children. 
D)  The support test for qualifying relatives focuses on the support the potential dependent self-provides while the support test for qualifying children focuses on the support the taxpayer provides.

Question 9

A taxpayer who is claimed as a dependent on another's tax return may not claim any personal or dependency exemptions on his or her tax return.

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is NOT a from AGI deduction?

Accepted Answer

A)  Standard deduction. 
B)  Personal exemption. 
C)  Itemized deduction. 
D)  None of these. All of these are from AGI deductions. 
A)  Standard deduction. 
B)  Personal exemption. 
C)  Itemized deduction. 
D)  None of these. All of these are from AGI deductions.

Question 11

Which of the following statements is true?

Accepted Answer

A)  Income character determines the tax year in which the income is taxed. 
B)  A taxpayer selling a capital asset at a gain recognizes ordinary income. 
C)  Income character depends on the taxpayer's filing status. 
D)  Qualified dividend income is taxed at a lower rate than an equal amount of ordinary income. 
A)  Income character determines the tax year in which the income is taxed. 
B)  A taxpayer selling a capital asset at a gain recognizes ordinary income. 
C)  Income character depends on the taxpayer's filing status. 
D)  Qualified dividend income is taxed at a lower rate than an equal amount of ordinary income.

Question 12

An individual with gross income of $5,000 could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements regarding tax deductions is false?

Accepted Answer

A)  Deductions can be labeled as deductions above the line or deductions below the line. 
B)  The standard deduction is a from AGI deduction. 
C)  From AGI deductions tend to be associated with business activities while for AGI deductions tend to be associated with personal activities. 
D)  Taxpayers are not entitled to any deductions unless specific provisions in the tax code allow the deductions. 
A)  Deductions can be labeled as deductions above the line or deductions below the line. 
B)  The standard deduction is a from AGI deduction. 
C)  From AGI deductions tend to be associated with business activities while for AGI deductions tend to be associated with personal activities. 
D)  Taxpayers are not entitled to any deductions unless specific provisions in the tax code allow the deductions.

Question 14

In February of 2016, Lorna and Kirk were married. During 2017, Lorna received $40,000 ofcompensation from her employer and Kirk received $30,000 of compensation from his employer. The couple together reported $2,000 of itemized deductions. Lorna and Kirk filed separately in2017. What is Lorna's taxable income and what is her tax liability (use the applicable tax rateschedule)?

Accepted Answer

The answer of In February of 2016, Lorna and Kirk...

Question 15

Jane is unmarried and has no children, but provides more than half of her mother'sfinancial support. Jane's mother lives in an apartment across town and has a part-time job earning $5,000 a year. Which is the most advantageous filing status available to Jane?

Accepted Answer

A)  Qualifying individual. 
B)  Head of household. 
C)  Single. 
D)  Surviving single. 
A)  Qualifying individual. 
B)  Head of household. 
C)  Single. 
D)  Surviving single.

Question 16

In certain circumstances, a married taxpayer who does not file a joint tax return with her spouse may qualify for the head of household filing status.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements regarding for AGI tax deductions is true?

Accepted Answer

A)  A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's deductible exemption amounts. 
B)  Taxpayers subtract for AGI deductions from gross income to determine AGI. 
C)  A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's standard deduction amount. 
D)  A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's itemized deductions. 
A)  A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's deductible exemption amounts. 
B)  Taxpayers subtract for AGI deductions from gross income to determine AGI. 
C)  A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's standard deduction amount. 
D)  A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's itemized deductions.

Question 18

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 thecurrent year. Which of the following is a true statement regarding whether the Jacksons can claim a dependency exemption for Ned in the current year?

Accepted Answer

A)  Assume that Ned originally moved into the Jackson's home two years ago and he has lived there ever since. If this year Ned earned $3,000 at a part time job and he received $5,000 in municipal bond interest, he may qualify as the Jackson's dependent so long as the Jacksons provided more than half his support. 
B)  If Ned moved into the Jackson's home in June and he lived there for the remainder of the year, he may qualify as the Jackson's qualifying relative. 
C)  If Ned lived in the Jackson's home for the entire year, he will qualify as their dependent no matter who provided his support. 
D)  If Ned is over 19 or he is not a full-time student, he cannot qualify as the Jackson's dependent. 
A)  Assume that Ned originally moved into the Jackson's home two years ago and he has lived there ever since. If this year Ned earned $3,000 at a part time job and he received $5,000 in municipal bond interest, he may qualify as the Jackson's dependent so long as the Jacksons provided more than half his support. 
B)  If Ned moved into the Jackson's home in June and he lived there for the remainder of the year, he may qualify as the Jackson's qualifying relative. 
C)  If Ned lived in the Jackson's home for the entire year, he will qualify as their dependent no matter who provided his support. 
D)  If Ned is over 19 or he is not a full-time student, he cannot qualify as the Jackson's dependent.

Question 19

Anna is a 21-year-old full-time college student (she plans on returning home at the end of the school year). Her total support for the year was $34,000 (including $8,000 oftuition). Anna covered $12,000 of her support costs out of her own pocket (from savings, she did not work) and she received an $8,000 scholarship that covered all of her tuition costs. Which of the following statements regarding who is allowed to claim Anna as an exemption is true?

Accepted Answer

A)  Even if Anna's grandparents provided the remaining $14,000 of support for Anna ($34,000 minus $12,000 minus $8,000) they would not be able to claim her as a dependent. 
B)  Because she provided more than half her own support, Anna may claim a personal exemption for herself. 
C)  Even if Anna's parents provided the remaining $14,000 of support for Anna ($34,000 minus $12,000 minus $8,000), they would not be able to claim her as a dependent. 
D)  None of these statements is true. 
A)  Even if Anna's grandparents provided the remaining $14,000 of support for Anna ($34,000 minus $12,000 minus $8,000) they would not be able to claim her as a dependent. 
B)  Because she provided more than half her own support, Anna may claim a personal exemption for herself. 
C)  Even if Anna's parents provided the remaining $14,000 of support for Anna ($34,000 minus $12,000 minus $8,000), they would not be able to claim her as a dependent. 
D)  None of these statements is true.

Question 20

Taxpayers are allowed to deduct more for each personal exemption they claim than for each dependency exemption they claim.

Accepted Answer

A) True 
 B)False

The test for a qualifying child includes a gross income restriction while the test for qualifying relative does not.

A personal automobile is a capital asset.

Which of the following statements regarding exclusions and/or deferrals is false?

In June of year 1, Edgar's wife Cathy died and Edgar did not remarry during the year.What is his filing status for year 1 (assuming they did not have any dependents)?

In year 1, Harold Weston's wife died. Since her death, he has maintained a household for their son Frank (age 3), his qualifying child. Which is the most advantageous filing status available to Harold in year 4?

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

A taxpayer who is claimed as a dependent on another's tax return may not claim any personal or dependency exemptions on his or her tax return.

Which of the following is NOT a from AGI deduction?

Which of the following statements is true?

An individual with gross income of $5,000 could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.

Which of the following statements regarding tax deductions is false?

Jane is unmarried and has no children, but provides more than half of her mother'sfinancial support. Jane's mother lives in an apartment across town and has a part-time job earning $5,000 a year. Which is the most advantageous filing status available to Jane?

In certain circumstances, a married taxpayer who does not file a joint tax return with her spouse may qualify for the head of household filing status.

Which of the following statements regarding for AGI tax deductions is true?

Taxpayers are allowed to deduct more for each personal exemption they claim than for each dependency exemption they claim.

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

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

The test for a qualifying child includes a gross income restriction while the test for qualifying relative does not.

A personal automobile is a capital asset.

Which of the following statements regarding exclusions and/or deferrals is false?

In June of year 1, Edgar's wife Cathy died and Edgar did not remarry during the year.What is his filing status for year 1 (assuming they did not have any dependents)?

In year 1, Harold Weston's wife died. Since her death, he has maintained a household for their son Frank (age 3), his qualifying child. Which is the most advantageous filing status available to Harold in year 4?

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

A taxpayer who is claimed as a dependent on another's tax return may not claim any personal or dependency exemptions on his or her tax return.

Which of the following is NOT a from AGI deduction?

Which of the following statements is true?

An individual with gross income of $5,000 could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.

Which of the following statements regarding tax deductions is false?

Jane is unmarried and has no children, but provides more than half of her mother'sfinancial support. Jane's mother lives in an apartment across town and has a part-time job earning $5,000 a year. Which is the most advantageous filing status available to Jane?

In certain circumstances, a married taxpayer who does not file a joint tax return with her spouse may qualify for the head of household filing status.

Which of the following statements regarding for AGI tax deductions is true?

Taxpayers are allowed to deduct more for each personal exemption they claim than for each dependency exemption they claim.

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