Question 1

Match each statement with the correct term below.
-Kiddie tax

Accepted Answer

A) Prepaid interest. 
B) Either a qualifying child or a qualifying relative 
C) One test for a qualifying relative. 
D) The minimum amount a taxpayer can deduct for personal expenditures. 
E) A deduction in this category is always allowed. That is, there is no minimum allowable amount and generally no income limitation placed on these deductions.
F)Generally, these deductions are for specifically allowed personal expenditures.
G)An exception to this test is a custodial parent.
H)Interest paid on debt used to buy securities.
I)Interest paid on credit cards, personal loans, car loans, etc.
J)Interest paid on a mortgage secured by the taxpayer's residence. The proceeds of the loan are used to pay off a credit card, the interest is not deductible.
K)A tax designed to prevent the shifting of unearned income to children of the taxpayer. 
A) Prepaid interest. 
B) Either a qualifying child or a qualifying relative 
C) One test for a qualifying relative. 
D) The minimum amount a taxpayer can deduct for personal expenditures. 
E) A deduction in this category is always allowed. That is, there is no minimum allowable amount and generally no income limitation placed on these deductions.
F)Generally, these deductions are for specifically allowed personal expenditures.
G)An exception to this test is a custodial parent.
H)Interest paid on debt used to buy securities.
I)Interest paid on credit cards, personal loans, car loans, etc.
J)Interest paid on a mortgage secured by the taxpayer's residence. The proceeds of the loan are used to pay off a credit card, the interest is not deductible.
K)A tax designed to prevent the shifting of unearned income to children of the taxpayer.

Question 2

Debra and Ken refinance their personal residence on July 1, 2017. They borrow $96,000 over a 20-year period and paid points of $1,920. For 2017, what amount of the points is deductible?

Accepted Answer

A) $- 0 - 
B) $48 
C) $96 
D) $480 
E) $960 
A) $- 0 - 
B) $48 
C) $96 
D) $480 
E) $960

Question 3

Dorchester purchased investment realty in 2001 for $25,000. During the current year he contributes it to the American Heart Association to use as the site for its new local headquarters. The realty has a value of $52,000 on the contribution date, and Dorchester's AGI is $100,000. Dorchester's maximum current year contribution deduction is

Accepted Answer

A) $- 0 - 
B) $25,000 
C) $30,000 
D) $50,000 
E) $52,000 
A) $- 0 - 
B) $25,000 
C) $30,000 
D) $50,000 
E) $52,000

Question 4

Match each statement with the correct term below.
-Surviving spouse

Accepted Answer

A) Unmarried without dependents. 
B) Generally used when financial disagreement exists. 
C) Unmarried and provides a household for a dependent. 
D) Use the same tax rate schedule as married, filing jointly. 
E) Determines which tax rate schedule and standard deduction amount is applicable. 
A) Unmarried without dependents. 
B) Generally used when financial disagreement exists. 
C) Unmarried and provides a household for a dependent. 
D) Use the same tax rate schedule as married, filing jointly. 
E) Determines which tax rate schedule and standard deduction amount is applicable.

Question 5

Julian and Judy divorced and Julian received custody of their child. Judy must pay child support of $24,000 annually. Therefore, Julian agreed in writing to allow Judy to claim the child as a dependent. Julian maintains a home for himself and the child. For the current year, Julian's filing status and total number of dependents are

Accepted Answer

A) Single and no dependents. 
B) Single and one dependent. 
C) Head of household and one dependent. 
D) Head of household and no dependents. 
A) Single and no dependents. 
B) Single and one dependent. 
C) Head of household and one dependent. 
D) Head of household and no dependents.

Question 6

Art is a 21 year old full-time student. Art's support is provided as follows:
?
$$\begin{array} { l l } 
\text { A.t } & 48 \% \
\text { A.t's parents } & 52 \%
\end{array}$$
Assuming all other tests for dependency not mentioned are satisfied,
?

Accepted Answer

A) Art is a qualifying child of his parents but is not a qualifying relative 
B) Art is a qualifying relative of his parents but is not a qualifying child 
C) Art is a qualifying child and a qualifying relative. 
D) Art is neither a qualifying child nor a qualifying relative. 
A) Art is a qualifying child of his parents but is not a qualifying relative 
B) Art is a qualifying relative of his parents but is not a qualifying child 
C) Art is a qualifying child and a qualifying relative. 
D) Art is neither a qualifying child nor a qualifying relative.

Question 7

Kristin has AGI of $120,000 in 2018 and 2019. She makes cash contributions to the American Cancer Society of $75,000 in 2018 and $77,000 in 2019. Kristin's charitable contribution carryover from 2020 is:

Accepted Answer

A) $- 0 - 
B) $3,000 
C) $5,000 
D) $8,000 
E) $34,000 
A) $- 0 - 
B) $3,000 
C) $5,000 
D) $8,000 
E) $34,000

Question 8

Morris and Marianne have a $310,000 mortgage on their personal residence and a $90,000 mortgage on their mountain retreat. The interest on both of them qualifies as deductible qualified home mortgage interest.

Accepted Answer

A) True 
 B)False

Question 9

Randolph borrows $100,000 from his uncle's bank and invests the proceeds in various state and local bonds. He pays $9,000 in interest on the loan during the current year. The bonds produce $7,200 of tax-exempt interest income. Randolph reports adjusted gross income of $100,000 in the current year. How much of the interest expense is deductible by Randolph?

Accepted Answer

A) $7,000 
B) $7,200 
C) $9,000 
D) None of this interest is deductible. 
A) $7,000 
B) $7,200 
C) $9,000 
D) None of this interest is deductible.

Question 10

Alli is 23 years old, a full time student, and a dependent of her parents. She earns $2,000 from her job as a waitress and receives $5,000 of interest on a savings account established by her grandparents.
a.What is Alli's taxable income?
b.What is Alli's tax liability on the taxable income??

Accepted Answer

a. Alli's taxable income is @#LAT-DLM&. Because Al

Question 11

Which of the following individuals or couples qualify for the child and dependent-care credit?
I.Lois is single and earns $45,000 for the year. She pays $2,600 in child-care costs for her 8-year-old daughter.
II.Patrick and Carol are married and together they earn $67,000 ($42,000 and $25,000 respectively). They pay $5,000 in child-care costs for their twin boys, age 11.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Question 12

Sophia, single, won $1,000 from the Minnesota state lottery during the current year. During the year, she purchased lottery tickets of $600 that resulted in no winnings. Her annual salary is $100,000, and she has other itemized deductions of $13,000. What is the amount of her total itemized deductions for the year?

Accepted Answer

A) $13,000 
B) $13,400 
C) $13,600 
D) $14,000 
A) $13,000 
B) $13,400 
C) $13,600 
D) $14,000

Question 13

Unreimbursed meals and entertainment paid by employees are deductible as an itemized deduction to the extent the amount exceeds 2-percent of adjusted gross income.

Accepted Answer

A) True 
 B)False

Question 14

Orrill is single and has custody of his 8-year-old son Jack. Orrill has gross income of $46,000, deductions for adjusted gross income of $2,200 and itemized deductions of $6,000. What is his tax liability for 2018 before any tax credits?

Accepted Answer

A) $2,824 
B) $3,544 
C) $3,625 
D) $4,264 
E) $4,984 
A) $2,824 
B) $3,544 
C) $3,625 
D) $4,264 
E) $4,984

Question 15

Homer has AGI of $41,500, and makes the following donations in the current year:
What is Homer's charitable contribution deduction for the current year?
- $\$ 1,000$ cash to the United Way.
-100 hours contributed to the Red Cross to help flood victims (Homer's normal billing rate is $\$ 40$ per hour in his consulting business).
- 15 old dress shirts to Goodwill Industries, (original cost $\$ 300$; fair market value $\$ 60$ ).
- $\$ 1,000$ cash to an old friend, Sam, to help cover his medical bills

Accepted Answer

A) $1,000- 
B) $1,060 
C) $1,300 
D) $2,060 
E) $6,300 
A) $1,000- 
B) $1,060 
C) $1,300 
D) $2,060 
E) $6,300

Question 16

Ronald pays the following taxes during the year:
?
$$\begin{array} { l r } 
\text { Real estate taxes on his personal residence } & \$ 4,500 \
\text { Real estate taxes on rental property } & 2,000 \
\text { State sal es taxes (from Federal Sales tax table) } & 1,000 \
\text { State income taxes } & 7,400 \
\text { Federal income taxes } & 5,400
\end{array}$$
What is the amount Ronald can deduct for taxes as an itemized deduction for the year?

Accepted Answer

A) $4,500 
B) $7,400 
C) $10,000 
D) $11,900 
E) $13,900 
A) $4,500 
B) $7,400 
C) $10,000 
D) $11,900 
E) $13,900

Question 17

During the current year, Barney loses $5,000 while gambling. His gambling winnings for the year are $2,000. What is his gambling loss deduction assuming he is single and has other itemized deductions of $15,000?

Accepted Answer

A) $0 
B) $2,000 
C) $3,000 
D) $5,000 
A) $0 
B) $2,000 
C) $3,000 
D) $5,000

Question 18

Reggie and Ramona are married and have two children in college. Jason is a sophomore, and Justine is a graduate student. They pay $2,500 in tuition and fees for Jason, $900 for his books and $3,000 for his room and board. Justine's tuition and fees are $5,000, her book expense is $800, and her room and board expenses are $2,600. Their adjusted gross income is $170,000. What amount can they claim as a tax credit for the higher education expenses she pays?

Accepted Answer

A) $-0- 
B) $1,175 
C) $3,175 
D) $3,638 
E) $4,850 
A) $-0- 
B) $1,175 
C) $3,175 
D) $3,638 
E) $4,850

Question 19

Indicate the proper treatment in the current year for the underlined amounts. Treat each item as an independent event. Indicate whether the amount is deductible or not; if deductible whether it is deductible FOR or FROM AGI; and indicate the amount of the deduction for the current year considering any relevant limitations. Assume the taxpayer has deductions greater than the standard deduction, has AGI of $69,000 without regard to the following transactions and has no "total" income limitations related to itemized deductions.
-Taxpayer contribution of $250 to the Democratic Party.

Accepted Answer

A) Not Deductible 
B) Deductible - For AGI 
C) Deductible - From AGI 
A) Not Deductible 
B) Deductible - For AGI 
C) Deductible - From AGI

Question 20

To be a qualifying relative, an individual must meet certain tests. These tests include,
I.the gross income test.
II.the age test.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Match each statement with the correct term below. -Kiddie tax

Debra and Ken refinance their personal residence on July 1, 2017. They borrow $96,000 over a 20-year period and paid points of $1,920. For 2017, what amount of the points is deductible?

Match each statement with the correct term below. -Surviving spouse

Art is a 21 year old full-time student. Art's support is provided as follows: ? A.t 48\% A.t's parents 52\% Assuming all other tests for dependency not mentioned are satisfied, ?

Kristin has AGI of $120,000 in 2018 and 2019. She makes cash contributions to the American Cancer Society of $75,000 in 2018 and $77,000 in 2019. Kristin's charitable contribution carryover from 2020 is:

Morris and Marianne have a $310,000 mortgage on their personal residence and a $90,000 mortgage on their mountain retreat. The interest on both of them qualifies as deductible qualified home mortgage interest.

Alli is 23 years old, a full time student, and a dependent of her parents. She earns $2,000 from her job as a waitress and receives $5,000 of interest on a savings account established by her grandparents. a.What is Alli's taxable income? b.What is Alli's tax liability on the taxable income??

Unreimbursed meals and entertainment paid by employees are deductible as an itemized deduction to the extent the amount exceeds 2-percent of adjusted gross income.

Orrill is single and has custody of his 8-year-old son Jack. Orrill has gross income of $46,000, deductions for adjusted gross income of $2,200 and itemized deductions of $6,000. What is his tax liability for 2018 before any tax credits?

During the current year, Barney loses $5,000 while gambling. His gambling winnings for the year are $2,000. What is his gambling loss deduction assuming he is single and has other itemized deductions of $15,000?

To be a qualifying relative, an individual must meet certain tests. These tests include, I.the gross income test. II.the age test.

Federal Income Taxation-An Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses-Deductions and Limitations

Acquisitions of Property

Cost Recovery on Property: Depreciation, Depletion, and Amortization

Property Dispositions

Non-Recognition Transactions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Choice of Business Entity-Other Considerations

Tax Research

Filters

Exam 8: Taxation of Individuals

Match each statement with the correct term below. -Kiddie tax

Debra and Ken refinance their personal residence on July 1, 2017. They borrow $96,000 over a 20-year period and paid points of $1,920. For 2017, what amount of the points is deductible?

Match each statement with the correct term below. -Surviving spouse

Art is a 21 year old full-time student. Art's support is provided as follows: ? A.t 48\% A.t's parents 52\% Assuming all other tests for dependency not mentioned are satisfied, ?

Kristin has AGI of $120,000 in 2018 and 2019. She makes cash contributions to the American Cancer Society of $75,000 in 2018 and $77,000 in 2019. Kristin's charitable contribution carryover from 2020 is:

Morris and Marianne have a $310,000 mortgage on their personal residence and a $90,000 mortgage on their mountain retreat. The interest on both of them qualifies as deductible qualified home mortgage interest.

Alli is 23 years old, a full time student, and a dependent of her parents. She earns $2,000 from her job as a waitress and receives $5,000 of interest on a savings account established by her grandparents. a.What is Alli's taxable income? b.What is Alli's tax liability on the taxable income??

Unreimbursed meals and entertainment paid by employees are deductible as an itemized deduction to the extent the amount exceeds 2-percent of adjusted gross income.

Orrill is single and has custody of his 8-year-old son Jack. Orrill has gross income of $46,000, deductions for adjusted gross income of $2,200 and itemized deductions of $6,000. What is his tax liability for 2018 before any tax credits?

During the current year, Barney loses $5,000 while gambling. His gambling winnings for the year are $2,000. What is his gambling loss deduction assuming he is single and has other itemized deductions of $15,000?

To be a qualifying relative, an individual must meet certain tests. These tests include, I.the gross income test. II.the age test. ​

Federal Income Taxation-An Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses-Deductions and Limitations

Acquisitions of Property

Cost Recovery on Property: Depreciation, Depletion, and Amortization

Property Dispositions

Non-Recognition Transactions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Choice of Business Entity-Other Considerations

Tax Research

Filters

To be a qualifying relative, an individual must meet certain tests. These tests include, I.the gross income test. II.the age test.