Question 1

Which of the following statements concerning the individual alternative minimum tax (AMT)is true?

Accepted Answer

A) The calculation of alternative minimum taxable income begins with taxable income for regular tax purposes. 
B) A taxpayer with no tax preference items for the year can't be liable for AMT. 
C) An individual is allowed the same exemption as a corporation in calculating the AMT base. 
D) The individual AMT rate is a flat 28%. 
A) The calculation of alternative minimum taxable income begins with taxable income for regular tax purposes. 
B) A taxpayer with no tax preference items for the year can't be liable for AMT. 
C) An individual is allowed the same exemption as a corporation in calculating the AMT base. 
D) The individual AMT rate is a flat 28%. A

Question 2

Which of the following statements concerning the exemption phaseout is true?

Accepted Answer

A) The phaseout applies only to taxpayers with a 39.6% marginal income tax rate. 
B) The phaseout can reduce a taxpayer's exemption amount to zero. 
C) The phaseout doesn't apply to taxpayers who use the standard deduction instead of electing to itemize deductions. 
D) Statements A.,B.,and C.are false. 
A) The phaseout applies only to taxpayers with a 39.6% marginal income tax rate. 
B) The phaseout can reduce a taxpayer's exemption amount to zero. 
C) The phaseout doesn't apply to taxpayers who use the standard deduction instead of electing to itemize deductions. 
D) Statements A.,B.,and C.are false. B

Question 3

Alice Grim,a single taxpayer,has $219,000 taxable income,which includes a $20,000 capital gain taxed at 15%.Her alternative minimum taxable income in excess of her exemption amount is $237,400.Compute Alice's regular tax,AMT,and total tax.

Accepted Answer

Alice's regular tax is $52,200 = $49,200 tax on $199,000 ordinary income + $3,000 capital gains tax.Tentative minimum tax is $60,146 [26% × 186,300] + [28% × $31,100] + $3,000 capital gains tax.AMT is $7,946 ($60,146 − $52,200).Total tax (regular tax + AMT)is $60,146.

Question 4

Adjusted gross income equals total income less itemized deductions.

Accepted Answer

A) True 
 B)False

Question 5

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

Accepted Answer

A) The rate schedule for calculating regular tax liability depends on the taxpayer's filing status. 
B) All taxpayer,regardless of the amount of their taxable income,pay a 10% tax on their first bracket of income. 
C) The individual tax rate schedules are adjusted annually for inflation. 
D) The tax brackets in the single rate schedule are one-half of the brackets in the married-filing-jointly rate schedule. 
A) The rate schedule for calculating regular tax liability depends on the taxpayer's filing status. 
B) All taxpayer,regardless of the amount of their taxable income,pay a 10% tax on their first bracket of income. 
C) The individual tax rate schedules are adjusted annually for inflation. 
D) The tax brackets in the single rate schedule are one-half of the brackets in the married-filing-jointly rate schedule.

Question 6

Mr.and Mrs.Daniels,ages 45,and 42,had the following income items in 2017: Individual Tax Rate Schedules and Standard Deduction Table.     Mr.and Mrs.Daniels have no dependents and claim the standard deduction.Compute their income tax liability on a joint return.

Accepted Answer

A) $19,388 
B) $19,978 
C) $20,863 
D) None of the choices are correct. 
A) $19,388 
B) $19,978 
C) $20,863 
D) None of the choices are correct.

Question 7

Mr.and Mrs.Kay,ages 68 and 66,file a joint return.Mrs.Kay is legally blind.Compute their standard deduction.

Accepted Answer

A) $12,700 
B) $16,450 
C) $15,200 
D) $17,350 
A) $12,700 
B) $16,450 
C) $15,200 
D) $17,350

Question 8

An individual's taxable income equals adjusted gross income less the exemption amount.

Accepted Answer

A) True 
 B)False

Question 9

Melissa,age 16,is claimed as a dependent on her parents' tax return.This year,Melissa earned $510 from babysitting and $220 interest income from a savings account.Compute Melissa's standard deduction.

Accepted Answer

A) $730 
B) $860 
C) $510 
D) $1,050 
A) $730 
B) $860 
C) $510 
D) $1,050

Question 10

Mr.and Mrs.Steel,who file a joint return,have $513,200 taxable income in 2017.Compute their regular tax liability.

Accepted Answer

A) $105,062 
B) $148,458 
C) $176,060 
D) None of the above 
A) $105,062 
B) $148,458 
C) $176,060 
D) None of the above

Question 11

Charlie is single and provides 100% of the financial support for his dependent mother,Angela,who lives with Charlie.Charlie's filing status is head of household.

Accepted Answer

A) True 
 B)False

Question 12

Mrs.Raines died on June 2,2016.Mr.Raines has not remarried and has no children or other dependents.What is his filing status for 2016 and 2017?

Accepted Answer

A) Surviving spouse for 2016 and 2017. 
B) Surviving spouse for 2016; single for 2017. 
C) Married filing jointly for 2016; surviving spouse for 2017. 
D) Married filing jointly for 2016; single for 2017. 
A) Surviving spouse for 2016 and 2017. 
B) Surviving spouse for 2016; single for 2017. 
C) Married filing jointly for 2016; surviving spouse for 2017. 
D) Married filing jointly for 2016; single for 2017.

Question 13

Tamara and Todd Goble,ages 66 and 60,file a joint return.Todd is legally blind.Compute their standard deduction.

Accepted Answer

A) $15,800 
B) $12,700 
C) $13,950 
D) $15,200 
A) $15,800 
B) $12,700 
C) $13,950 
D) $15,200

Question 14

The earned income credit is available only to low-income taxpayers with dependent children.

Accepted Answer

A) True 
 B)False

Question 15

Mr.and Mrs.Lansing,who file a joint tax return,have four dependent children under age 17.Which of the following statements is false?

Accepted Answer

A) If the Lansings' AGI is $77,900,their child credit is $4,000. 
B) If the Lansings' AGI is $127,300,their child credit is $3,100. 
C) If the Lansings' AGI is $196,000,their child credit is zero. 
D) None of the above is false. 
A) If the Lansings' AGI is $77,900,their child credit is $4,000. 
B) If the Lansings' AGI is $127,300,their child credit is $3,100. 
C) If the Lansings' AGI is $196,000,their child credit is zero. 
D) None of the above is false.

Question 16

Which of the following taxpayers can't use the tax rates for married filing jointly in 2017?

Accepted Answer

A) Mr.Lane died on August 10,2017.Mrs.Lane has not remarried and has no dependent children. 
B) Mrs.Holden died on January 15,2016.Mr.Holden has not remarried and maintains a home for two dependent children. 
C) Mr.and Mrs.West were legally divorced on December 21,2017.Mrs.West has not remarried and maintains a home for three dependent children. 
D) All of the above taxpayers qualify for married filing jointly filing status. 
A) Mr.Lane died on August 10,2017.Mrs.Lane has not remarried and has no dependent children. 
B) Mrs.Holden died on January 15,2016.Mr.Holden has not remarried and maintains a home for two dependent children. 
C) Mr.and Mrs.West were legally divorced on December 21,2017.Mrs.West has not remarried and maintains a home for three dependent children. 
D) All of the above taxpayers qualify for married filing jointly filing status.

Question 17

Melissa,age 16,is claimed as a dependent on her parents' tax return.This year,Melissa earned $2,000 from babysitting and $1,280 interest income from a savings account.Compute Melissa's standard deduction.

Accepted Answer

A) $2,000 
B) $2,350 
C) $0 
D) $1,050 
A) $2,000 
B) $2,350 
C) $0 
D) $1,050

Question 18

The majority of individual taxpayers take the standard deduction rather than itemizing.

Accepted Answer

A) True 
 B)False

Question 19

Mrs.Paley died on July 14,2017.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 2017 and 2018.

Accepted Answer

A) True 
 B)False

Question 20

An extension of the time to file an individual tax return also extends the time to pay any balance of tax due with the return.

Accepted Answer

A) True 
 B)False

Which of the following statements concerning the individual alternative minimum tax (AMT)is true?

Which of the following statements concerning the exemption phaseout is true?

Alice Grim,a single taxpayer,has $219,000 taxable income,which includes a $20,000 capital gain taxed at 15%.Her alternative minimum taxable income in excess of her exemption amount is $237,400.Compute Alice's regular tax,AMT,and total tax.

Adjusted gross income equals total income less itemized deductions.

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

Mr.and Mrs.Daniels,ages 45,and 42,had the following income items in 2017: Individual Tax Rate Schedules and Standard Deduction Table. Mr.and Mrs.Daniels have no dependents and claim the standard deduction.Compute their income tax liability on a joint return.

Mr.and Mrs.Kay,ages 68 and 66,file a joint return.Mrs.Kay is legally blind.Compute their standard deduction.

An individual's taxable income equals adjusted gross income less the exemption amount.

Melissa,age 16,is claimed as a dependent on her parents' tax return.This year,Melissa earned $510 from babysitting and $220 interest income from a savings account.Compute Melissa's standard deduction.

Mr.and Mrs.Steel,who file a joint return,have $513,200 taxable income in 2017.Compute their regular tax liability.

Charlie is single and provides 100% of the financial support for his dependent mother,Angela,who lives with Charlie.Charlie's filing status is head of household.

Mrs.Raines died on June 2,2016.Mr.Raines has not remarried and has no children or other dependents.What is his filing status for 2016 and 2017?

Tamara and Todd Goble,ages 66 and 60,file a joint return.Todd is legally blind.Compute their standard deduction.

The earned income credit is available only to low-income taxpayers with dependent children.

Mr.and Mrs.Lansing,who file a joint tax return,have four dependent children under age 17.Which of the following statements is false?

Which of the following taxpayers can't use the tax rates for married filing jointly in 2017?

Melissa,age 16,is claimed as a dependent on her parents' tax return.This year,Melissa earned $2,000 from babysitting and $1,280 interest income from a savings account.Compute Melissa's standard deduction.

The majority of individual taxpayers take the standard deduction rather than itemizing.

Mrs.Paley died on July 14,2017.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 2017 and 2018.

An extension of the time to file an individual tax return also extends the time to pay any balance of tax due with the return.

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

Which of the following statements concerning the individual alternative minimum tax (AMT)is true?

Which of the following statements concerning the exemption phaseout is true?

Alice Grim,a single taxpayer,has $219,000 taxable income,which includes a $20,000 capital gain taxed at 15%.Her alternative minimum taxable income in excess of her exemption amount is $237,400.Compute Alice's regular tax,AMT,and total tax.

Adjusted gross income equals total income less itemized deductions.

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

Mr.and Mrs.Daniels,ages 45,and 42,had the following income items in 2017: Individual Tax Rate Schedules and Standard Deduction Table. Mr.and Mrs.Daniels have no dependents and claim the standard deduction.Compute their income tax liability on a joint return.

Mr.and Mrs.Kay,ages 68 and 66,file a joint return.Mrs.Kay is legally blind.Compute their standard deduction.

An individual's taxable income equals adjusted gross income less the exemption amount.

Melissa,age 16,is claimed as a dependent on her parents' tax return.This year,Melissa earned $510 from babysitting and $220 interest income from a savings account.Compute Melissa's standard deduction.

Mr.and Mrs.Steel,who file a joint return,have $513,200 taxable income in 2017.Compute their regular tax liability.

Charlie is single and provides 100% of the financial support for his dependent mother,Angela,who lives with Charlie.Charlie's filing status is head of household.

Mrs.Raines died on June 2,2016.Mr.Raines has not remarried and has no children or other dependents.What is his filing status for 2016 and 2017?

Tamara and Todd Goble,ages 66 and 60,file a joint return.Todd is legally blind.Compute their standard deduction.

The earned income credit is available only to low-income taxpayers with dependent children.

Mr.and Mrs.Lansing,who file a joint tax return,have four dependent children under age 17.Which of the following statements is false?

Which of the following taxpayers can't use the tax rates for married filing jointly in 2017?

Melissa,age 16,is claimed as a dependent on her parents' tax return.This year,Melissa earned $2,000 from babysitting and $1,280 interest income from a savings account.Compute Melissa's standard deduction.

The majority of individual taxpayers take the standard deduction rather than itemizing.

Mrs.Paley died on July 14,2017.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 2017 and 2018.

An extension of the time to file an individual tax return also extends the time to pay any balance of tax due with the return.

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