Exam 4: Individual Tax Overview

Joanna received $60,000 compensation from her employer,the value of her stock in ABC company appreciated by $5,000 during the year (but she did not sell any of the stock) ,she received $30,000 of life insurance proceeds from the death of her husband.What is the amount of Joanna's gross income from these items?

To be considered a qualifying child of a taxpayer,the individual must be the son or daughter of the taxpayer.

Anna is a 21-year-old full-time college student (she plans on returning home at the end of the school year) .Her total support for the year was $34,000 (including $8,000 of tuition) .Anna covered $12,000 of her support costs out of her own pocket (from savings,she did not work) and she received an $8,000 scholarship that covered all of her tuition costs.Which of the following statements regarding who is allowed to claim Anna as an exemption is true?

When determining whether a child meets the qualifying child support test for the parents,scholarships earned by the child do not count as support provided by the child.

Taxpayers are allowed to deduct more for each personal exemption they claim than for each dependency exemption they claim.

Which of the following shows the correct relationship among standard deduction amounts for the respective filing statuses?

Which of the following statements is true:

The relationship requirement for qualifying relative requires the potential qualifying relative to have a family relationship with the taxpayer.

Which of the following is NOT a from AGI deduction?

Inventory is a capital asset.

An individual with gross income of $5,000 could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.The gross income test requires that a qualifying relative's gross income for the year be less than the personal exemption amount.

Relative to for AGI deductions,from AGI deductions tend to relate to items that are more personal in nature.

Taxpayers need not include an income item in gross income unless there is a specific tax provision requiring the taxpayer to include the income item in gross income.Tax laws are based on the all-inclusive income concept.Under this concept,gross income generally includes all realized income from whatever source derived.

When determining whether a child meets the qualifying child support test for the child's grandparents,scholarships earned by the child do not count as support provided by the child.

In order to be a qualifying relative of another,an individual's gross income must be less than ________.

Which of the following statements regarding for AGI tax deductions is true?

In February of 2012,Lorna and Kirk were married.During 2013,Lorna received $40,000 of compensation from her employer and Kirk received $30,000 of compensation from his employer.The couple together reported $2,000 of itemized deductions.Lorna and Kirk filed separately in 2013.What are Lorna's taxable income and tax liability (use the applicable tax rate schedule) ?

Which of the following relationships does NOT pass the relationship test for a qualifying child?

Which of the following series of inequalities is generally most accurate?

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?