Exam 4: Individual Income Tax Overview dependents and Filing Status

Mason and his wife Madison have been married for five years.Jaxon,who is 18 years old and unrelated to Mason and Madison,has been living with Mason and Madison for the last two years.In May of year 1,Mason and Madison divorced.Mason and Jaxon stayed in the home and Madison moved out.During year 2,Mason provided all of Jaxon's support and Jaxon lived in the home for all of year 2.Jaxon did not earn any income during year 2.What is Mason's most favorable filing status for year 2?

Lebron received $50,000 of compensation from his employer and he received $400 of interest from a municipal bond.What is the amount of Lebron's gross income from these items?

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 no taxes,her parents can still claim her as a dependent.

Jan is unmarried and has no children,but she provides all of the financial support for her mother,who lives in an apartment across town.Jan's mother qualifies as Jan's dependent.Which is the most advantageous filing status available to Jan?

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?

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

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.

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?

The Tanakas filed jointly in 2018.Their AGI is $120,000.They reported $10,000 of qualified business income and $26,000 of itemized deductions.They also have two dependent qualifying children.The 2018 standard deduction amount for MFJ taxpayers is $24,000.What is the total amount of from AGI deductions they are allowed to claim on their 2018 tax return?

For purposes of the dependency exemption qualification,the test for qualifying children includes an age restriction but the test for qualifying relative does not.

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?

A personal automobile is a capital asset.

John Maylor is a self-employed plumber of John's John Service,his sole proprietorship.In the current year,John's John Service had revenue of $120,000 and $40,000 of business expenses. John also received $2,000 of interest income from corporate bonds. What is John's adjusted gross income assuming he had no other income or expenses (ignore any deduction for self-employment tax)

Filing status determines all of the following except ________

An individual may be considered as a qualifying child of her parents and a qualifying child of her grandparents in the same year.

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

Which of the following statements regarding dependents is false?

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?

In year 1,the Bennetts' 25-year-old daughter,Jane,is a full-time student at an out-of-state university but she plans to return home after the school year ends.In previous years,Jane has never worked and her parents have always been able to claim her as a dependent.In year 1,a kind neighbor offers to pay for all of Jane's educational and living expenses.Which of the following statements is most accurate regarding whether Jane's parents would be allowed to claim Jane as a dependent for year 1 assuming the neighbor pays for all of Jane's support?

Jasmine and her husband Arty have been married for 25 years.In May of this year,the couple divorced.During the year,Jasmine provided all the support for herself and her 22-year-old child Dexter who lived in the same home as Jasmine for the entire year.Dexter is employed full-time,earning $29,000 this year.What is the Jasmine's most favorable filing status for the year?