Question 1

The Dargers have itemized deductions that exceed the standard deduction.However, when they file their joint return, they choose the standard deduction option.

Accepted Answer

The answer of The Dargers have itemized deductions that exceed...

Question 2

Butch and Minerva are divorced in December of 2012.Since they were married for more than one-half of the year, they are considered asmarried for 2012.

Accepted Answer

A) True 
 B)False

Question 3

Warren, age 17, is claimed as a dependent by his father.In 2012, Warren has dividend income of $1,500 and earns $400 from a part-time job.

Accepted Answer

The answer of Warren, age 17, is claimed as a...

Question 4

Ed is divorced and maintains a home in which he and a dependent friend live.Ed does not qualify for head of household filing status.

Accepted Answer

A) True 
 B)False

Question 5

DeWayne is a U.S.citizen and resident.He spends much of each year in the United Kingdom on business.He is married to Petula, a U.K.citizen and resident of London.DeWayne has heard that it is possible that he can file a joint income tax return for U.S.purposes.If this is so, what are the constraints he should consider in making any such decision?

Accepted Answer

The election to file a joint return has

Question 6

Which of the following items, if any, is deductible?

Accepted Answer

A) Parking expenses incurred in connection with jury duty-taxpayer is a dentist. 
B) Substantiated gambling losses (not in excess of gambling winnings) from state lottery. 
C) Contributions to mayor's reelection campaign. 
D) Speeding ticket incurred while on business. 
E) Premiums paid on personal life insurance policy. 
A) Parking expenses incurred in connection with jury duty-taxpayer is a dentist. 
B) Substantiated gambling losses (not in excess of gambling winnings) from state lottery. 
C) Contributions to mayor's reelection campaign. 
D) Speeding ticket incurred while on business. 
E) Premiums paid on personal life insurance policy.

Question 7

Sylvia, age 17, is claimed by her parents as a dependent.During 2012, she had interest income from a bank savings account of $2,000 and income from a part-time job of $4,200.Sylvia's taxable income is:

Accepted Answer

A) $4,200 - $4,500 = $0. 
B) $6,200 - $5,700 = $500. 
C) $6,200 - $4,500 = $1,700. 
D) $6,200 - $950 = $5,250. 
E) None of the above. 
A) $4,200 - $4,500 = $0. 
B) $6,200 - $5,700 = $500. 
C) $6,200 - $4,500 = $1,700. 
D) $6,200 - $950 = $5,250. 
E) None of the above.

Question 8

For 2012, Jackson has taxable income of $30,005.When he uses the Tax Tables, Jackson finds that his tax liability is higher than under the Tax Rate Schedules.

Accepted Answer

The answer of For 2012, Jackson has taxable income of...

Question 9

After her divorce, Hope continues to support her ex-husband's sister, Cindy, who does not live with her.Hope can claim Cindy as a dependent.

Accepted Answer

A) True 
 B)False

Question 10

For the past few years, Corey's filing status has been as follows: 2008 (married/joint); 2009 (married/separate); 2010 (surviving spouse); 2011 (surviving spouse); and 2012 (head of household).Explain what probably has happened.

Accepted Answer

One probable explanation is that Corey's

Question 11

The additional standard deduction for age and blindness is not the same amount for single as for married taxpayers.

Accepted Answer

A) True 
 B)False

Question 12

Married taxpayers who file a joint return cannot later (i.e., after the filing due date) switch to separate returns for that year.

Accepted Answer

A) True 
 B)False

Question 13

When the kiddie tax applies, the child need not file an income tax return because the child's income will be reported on the parents' return.

Accepted Answer

A) True 
 B)False

Question 14

Which, if any, of the following is a correct statement relating to the kiddie tax?

Accepted Answer

A) If the parents are divorced, the income of the noncustodial parent is used to determine the allocable parental tax. 
B) The components for the application of the kiddie tax are not subject to adjustment for inflation. 
C) If the kiddie tax applies, the parents must include the income of the child on their own income tax return. 
D) The kiddie tax does not apply if both parents of the child are deceased. 
E) None of the above. 
A) If the parents are divorced, the income of the noncustodial parent is used to determine the allocable parental tax. 
B) The components for the application of the kiddie tax are not subject to adjustment for inflation. 
C) If the kiddie tax applies, the parents must include the income of the child on their own income tax return. 
D) The kiddie tax does not apply if both parents of the child are deceased. 
E) None of the above.

Question 15

Lee, a citizen of Korea, is a resident of the U.S.Any rent income Lee receives from land he owns in Korea is not subject to the U.S.income tax.

Accepted Answer

A) True 
 B)False

Question 16

Because they appear on page 1 of Form 1040, itemized deductions are also referred to as "page 1 deductions."

Accepted Answer

A) True 
 B)False

Question 17

Emily, whose husband died in December 2011, maintains a household in which her dependent daughter lives.Which (if any) of the following is her filing status for the tax year 2012? (Note: Emily is the executor of her husband's estate.)

Accepted Answer

A) Single. 
B) Married, filing separately. 
C) Surviving spouse. 
D) Head of household. 
E) Married, filing jointly. 
A) Single. 
B) Married, filing separately. 
C) Surviving spouse. 
D) Head of household. 
E) Married, filing jointly.

Question 18

Using borrowed funds from a mortgage on her home, Leah provides 52% of her own support, while her sons furnished the rest.Leah cannot be claimed as a dependent under a multiple support agreement.

Accepted Answer

A) True 
 B)False

Question 19

When the kiddie tax applies and the parents are divorced, the applicable parent (for determining the parental tax) is the one who has custody.

Accepted Answer

A) True 
 B)False

Question 20

Keith, age 17 and single, earns $3,000 during 2012.Keith's parents cannot claim him as a dependent even if he does not live with them.

Accepted Answer

A) True 
 B)False

Exam 3: Computing the Tax

The Dargers have itemized deductions that exceed the standard deduction.However, when they file their joint return, they choose the standard deduction option.

Butch and Minerva are divorced in December of 2012.Since they were married for more than one-half of the year, they are considered asmarried for 2012.

Warren, age 17, is claimed as a dependent by his father.In 2012, Warren has dividend income of $1,500 and earns $400 from a part-time job.

Ed is divorced and maintains a home in which he and a dependent friend live.Ed does not qualify for head of household filing status.

Which of the following items, if any, is deductible?

Sylvia, age 17, is claimed by her parents as a dependent.During 2012, she had interest income from a bank savings account of $2,000 and income from a part-time job of $4,200.Sylvia's taxable income is:

For 2012, Jackson has taxable income of $30,005.When he uses the Tax Tables, Jackson finds that his tax liability is higher than under the Tax Rate Schedules.

After her divorce, Hope continues to support her ex-husband's sister, Cindy, who does not live with her.Hope can claim Cindy as a dependent.

For the past few years, Corey's filing status has been as follows: 2008 (married/joint); 2009 (married/separate); 2010 (surviving spouse); 2011 (surviving spouse); and 2012 (head of household).Explain what probably has happened.

The additional standard deduction for age and blindness is not the same amount for single as for married taxpayers.

Married taxpayers who file a joint return cannot later (i.e., after the filing due date) switch to separate returns for that year.

When the kiddie tax applies, the child need not file an income tax return because the child's income will be reported on the parents' return.

Which, if any, of the following is a correct statement relating to the kiddie tax?

Lee, a citizen of Korea, is a resident of the U.S.Any rent income Lee receives from land he owns in Korea is not subject to the U.S.income tax.

Because they appear on page 1 of Form 1040, itemized deductions are also referred to as "page 1 deductions."

Emily, whose husband died in December 2011, maintains a household in which her dependent daughter lives.Which (if any) of the following is her filing status for the tax year 2012? (Note: Emily is the executor of her husband's estate.)

Using borrowed funds from a mortgage on her home, Leah provides 52% of her own support, while her sons furnished the rest.Leah cannot be claimed as a dependent under a multiple support agreement.

When the kiddie tax applies and the parents are divorced, the applicable parent (for determining the parental tax) is the one who has custody.

Keith, age 17 and single, earns $3,000 during 2012.Keith's parents cannot claim him as a dependent even if he does not live with them.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Tax Credits and Payments

A: Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 1

Property Transactions: Determination of Gain or Loss, Basis Considerations, and Nontaxable Exchanges-Part 2

Property Transactions: Capital Gains and Losses, 1231, Recapture Provisions

Alternative Minimum Tax

Accounting Periods and Methods

Corporations: Introduction and Operating Rules

Corporations: Organization and Capital Structure

Corporations: Distributions Not in Complete Liquidation

Corporations: Distributions in Complete Liquidation and an Overview of Reorganizations

Partnerships

S: Corporations

Exempt Entities

Multistate Corporate Taxation

Taxation of International Transactions

Tax Practice and Ethics

Income Taxation of Trusts and Estates

Filters