Question 1

An individual's taxable income equals adjusted gross income less the greater of the standard deduction or itemized deductions less the QBI deduction.

Accepted Answer

A) True 
 B)False

Question 2

Mr. and Mrs. Queen provide 90% of the financial support for Mrs. Queen's mother, Doreen, who lives in the couple's home. Doreen's only income this year is a $7,500 taxable pension from her former employer. Doreen is not considered a dependent of Mr. and Mrs. Queen this year for tax purposes.

Accepted Answer

A) True 
 B)False

Question 3

Ms. Kilo's regular income tax before credits on her Form 1040 is $450,890, and she has a $5,700 minimum tax credit from a previous year. Which of the following statements is true?

Accepted Answer

A)  A. If Ms. Kilo's tentative minimum tax is $450,890, her total tax liability is $445,190. 
B)  B. If Ms. Kilo's tentative minimum tax is $445,890, her total tax liability is $440,190. 
C)  C. If Ms. Kilo's tentative minimum tax is $445,890, her total tax liability is $445,890. 
D)  Both A. and C. are true. 
A)  A. If Ms. Kilo's tentative minimum tax is $450,890, her total tax liability is $445,190. 
B)  B. If Ms. Kilo's tentative minimum tax is $445,890, her total tax liability is $440,190. 
C)  C. If Ms. Kilo's tentative minimum tax is $445,890, her total tax liability is $445,890. 
D)  Both A. and C. are true.

Question 4

In computing taxable income, an individual will deduct the lesser of itemized deductions or the standard deduction.

Accepted Answer

A) True 
 B)False

Question 5

Alice Grim, a single taxpayer, has $719,000 taxable income, which includes a $240,000 capital gain taxed at 20%. Her alternative minimum taxable income in excess of her exemption amount is $937,400. Compute Alice's regular tax, AMT, and total tax.

Accepted Answer

Alice's regular tax is $190,445 = $142,4

Question 6

Mr. and Mrs. Reid reported $1,435,700 ordinary taxable income for regular tax purposes and had $158,200 positive AMT adjustments and preferences. Compute their tentative minimum tax.

Accepted Answer

A)  $414,414 
B)  $442,334 
C)  $446,292 
D)  $497,746 
A)  $414,414 
B)  $442,334 
C)  $446,292 
D)  $497,746

Question 7

Ruth Anne, a single taxpayer, reported $537,600 alternative minimum taxable income before any exemption on her 2020 Form 1040. Calculate Ruth Anne's AMT exemption.

Accepted Answer

A)  $4,800 
B)  $68,100 
C)  $72,900 
D)  None of these choices are correct 
A)  $4,800 
B)  $68,100 
C)  $72,900 
D)  None of these choices are correct

Question 8

The highest individual marginal rate for regular tax purposes is 37%, while the highest individual marginal rate for alternative minimum tax (AMT) purposes is only 28%.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following statements concerning extensions of time to file an individual tax return is true?

Accepted Answer

A)  The extension of time to file does not extend the time for payment of tax. 
B)  The extension of time to file is for four months. 
C)  An individual who requests an extension of time to file must provide the IRS with a reasonable explanation. 
D)  The IRS may deny an extension request if the taxpayer fails to provide a reasonable explanation. 
A)  The extension of time to file does not extend the time for payment of tax. 
B)  The extension of time to file is for four months. 
C)  An individual who requests an extension of time to file must provide the IRS with a reasonable explanation. 
D)  The IRS may deny an extension request if the taxpayer fails to provide a reasonable explanation.

Question 10

The standard deduction for single individuals equals one-half of the standard deduction for married individuals filing jointly.

Accepted Answer

A) True 
 B)False

Question 11

Mrs. Paley died on July 14, 2019. Her husband has not remarried. The Paleys' two children, ages 34 and 36, are financially independent. Mr. Paley may file as a surviving spouse in 2019 and 2020.

Accepted Answer

A) True 
 B)False

Question 12

Miss Blixen's regular income tax is $77,390, and her tentative minimum tax is $74,100. Consequently, Miss Blixen's alternative minimum tax (AMT) is zero.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following statements regarding the calculation of regular tax liability is false?

Accepted Answer

A)  Regardless of filing status, the highest marginal rate for individual taxpayers is 37%. 
B)  The individual tax rate schedules are adjusted annually for inflation. 
C)  All of the tax brackets in the married-filing-separately rate schedule are one-half of the brackets in the married-filing-jointly rate schedule. 
D)  None of these choices are false. 
A)  Regardless of filing status, the highest marginal rate for individual taxpayers is 37%. 
B)  The individual tax rate schedules are adjusted annually for inflation. 
C)  All of the tax brackets in the married-filing-separately rate schedule are one-half of the brackets in the married-filing-jointly rate schedule. 
D)  None of these choices are false.

Question 14

Marie, an unmarried taxpayer, is 26 years old. This year, Marie earned $50,000 gross income. Her itemized deductions totaled $5,100. Marie maintained a home for her 12-year-old sister who qualifies as Marie's dependent. Compute Marie's taxable income.

Accepted Answer

A)  $44,900 
B)  $31,350 
C)  $26,250 
D)  None of these choices are correct 
A)  $44,900 
B)  $31,350 
C)  $26,250 
D)  None of these choices are correct

Question 15

It is impossible for a progressive income tax system to be both marriage neutral and horizontally equitable.

Accepted Answer

A) True 
 B)False

Question 16

Bill and Afton are married and file a joint tax return. Bill is 67 and Afton is 66, and neither is legally blind. Their standard deduction for 2020 is $27,400.

Accepted Answer

A) True 
 B)False

Question 17

Which of the following statements regarding a qualifying child is false?

Accepted Answer

A)  The child must have been alive at least 180 days during the tax year. 
B)  The child must be a U.S. citizen or resident of the United States, Canada, or Mexico. 
C)  The child must not have provided more than 50% of his or her own financial support during the year. 
D)  The child must not have filed a joint return with a spouse unless the return was filed only as a refund claim. 
A)  The child must have been alive at least 180 days during the tax year. 
B)  The child must be a U.S. citizen or resident of the United States, Canada, or Mexico. 
C)  The child must not have provided more than 50% of his or her own financial support during the year. 
D)  The child must not have filed a joint return with a spouse unless the return was filed only as a refund claim.

Question 18

Married individuals who elect to file separate tax returns may use the single rates to compute their tax.

Accepted Answer

A) True 
 B)False

Question 19

The QBI deduction lowers AGI.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following statements concerning extensions of time to file an individual tax return is false?

Accepted Answer

A)  The extension of time to file does not extend the time for payment of any tax due. 
B)  An individual may receive an automatic extension of the filing date without providing any explanation to the IRS. 
C)  The extended due date of a calendar-year individual tax return is October 15 of the following year. 
D)  An extension request must be filed before the end of the taxable year. 
A)  The extension of time to file does not extend the time for payment of any tax due. 
B)  An individual may receive an automatic extension of the filing date without providing any explanation to the IRS. 
C)  The extended due date of a calendar-year individual tax return is October 15 of the following year. 
D)  An extension request must be filed before the end of the taxable year.

An individual's taxable income equals adjusted gross income less the greater of the standard deduction or itemized deductions less the QBI deduction.

Mr. and Mrs. Queen provide 90% of the financial support for Mrs. Queen's mother, Doreen, who lives in the couple's home. Doreen's only income this year is a $7,500 taxable pension from her former employer. Doreen is not considered a dependent of Mr. and Mrs. Queen this year for tax purposes.

Ms. Kilo's regular income tax before credits on her Form 1040 is $450,890, and she has a $5,700 minimum tax credit from a previous year. Which of the following statements is true?

In computing taxable income, an individual will deduct the lesser of itemized deductions or the standard deduction.

Alice Grim, a single taxpayer, has $719,000 taxable income, which includes a $240,000 capital gain taxed at 20%. Her alternative minimum taxable income in excess of her exemption amount is $937,400. Compute Alice's regular tax, AMT, and total tax.

Mr. and Mrs. Reid reported $1,435,700 ordinary taxable income for regular tax purposes and had $158,200 positive AMT adjustments and preferences. Compute their tentative minimum tax.

Ruth Anne, a single taxpayer, reported $537,600 alternative minimum taxable income before any exemption on her 2020 Form 1040. Calculate Ruth Anne's AMT exemption.

The highest individual marginal rate for regular tax purposes is 37%, while the highest individual marginal rate for alternative minimum tax (AMT) purposes is only 28%.

Which of the following statements concerning extensions of time to file an individual tax return is true?

The standard deduction for single individuals equals one-half of the standard deduction for married individuals filing jointly.

Mrs. Paley died on July 14, 2019. Her husband has not remarried. The Paleys' two children, ages 34 and 36, are financially independent. Mr. Paley may file as a surviving spouse in 2019 and 2020.

Miss Blixen's regular income tax is $77,390, and her tentative minimum tax is $74,100. Consequently, Miss Blixen's alternative minimum tax (AMT) is zero.

Which of the following statements regarding the calculation of regular tax liability is false?

Marie, an unmarried taxpayer, is 26 years old. This year, Marie earned $50,000 gross income. Her itemized deductions totaled $5,100. Marie maintained a home for her 12-year-old sister who qualifies as Marie's dependent. Compute Marie's taxable income.

It is impossible for a progressive income tax system to be both marriage neutral and horizontally equitable.

Bill and Afton are married and file a joint tax return. Bill is 67 and Afton is 66, and neither is legally blind. Their standard deduction for 2020 is $27,400.

Which of the following statements regarding a qualifying child is false?

Married individuals who elect to file separate tax returns may use the single rates to compute their tax.

The QBI deduction lowers AGI.

Which of the following statements concerning extensions of time to file an individual tax return is false?

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, Llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters

Exam 14: The Individual Tax Formula

An individual's taxable income equals adjusted gross income less the greater of the standard deduction or itemized deductions less the QBI deduction.

Mr. and Mrs. Queen provide 90% of the financial support for Mrs. Queen's mother, Doreen, who lives in the couple's home. Doreen's only income this year is a $7,500 taxable pension from her former employer. Doreen is not considered a dependent of Mr. and Mrs. Queen this year for tax purposes.

Ms. Kilo's regular income tax before credits on her Form 1040 is $450,890, and she has a $5,700 minimum tax credit from a previous year. Which of the following statements is true?

In computing taxable income, an individual will deduct the lesser of itemized deductions or the standard deduction.

Alice Grim, a single taxpayer, has $719,000 taxable income, which includes a $240,000 capital gain taxed at 20%. Her alternative minimum taxable income in excess of her exemption amount is $937,400. Compute Alice's regular tax, AMT, and total tax.

Mr. and Mrs. Reid reported $1,435,700 ordinary taxable income for regular tax purposes and had $158,200 positive AMT adjustments and preferences. Compute their tentative minimum tax.

Ruth Anne, a single taxpayer, reported $537,600 alternative minimum taxable income before any exemption on her 2020 Form 1040. Calculate Ruth Anne's AMT exemption.

The highest individual marginal rate for regular tax purposes is 37%, while the highest individual marginal rate for alternative minimum tax (AMT) purposes is only 28%.

Which of the following statements concerning extensions of time to file an individual tax return is true?

The standard deduction for single individuals equals one-half of the standard deduction for married individuals filing jointly.

Mrs. Paley died on July 14, 2019. Her husband has not remarried. The Paleys' two children, ages 34 and 36, are financially independent. Mr. Paley may file as a surviving spouse in 2019 and 2020.

Miss Blixen's regular income tax is $77,390, and her tentative minimum tax is $74,100. Consequently, Miss Blixen's alternative minimum tax (AMT) is zero.

Which of the following statements regarding the calculation of regular tax liability is false?

Marie, an unmarried taxpayer, is 26 years old. This year, Marie earned $50,000 gross income. Her itemized deductions totaled $5,100. Marie maintained a home for her 12-year-old sister who qualifies as Marie's dependent. Compute Marie's taxable income.

It is impossible for a progressive income tax system to be both marriage neutral and horizontally equitable.

Bill and Afton are married and file a joint tax return. Bill is 67 and Afton is 66, and neither is legally blind. Their standard deduction for 2020 is $27,400.

Which of the following statements regarding a qualifying child is false?

Married individuals who elect to file separate tax returns may use the single rates to compute their tax.

The QBI deduction lowers AGI.

Which of the following statements concerning extensions of time to file an individual tax return is false?

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, Llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

Compensation and Retirement Planning

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters