Question 1

Char and Russ Dasrup have one daughter,Siera,who is 16 years old.In November of last year,the Dasrup's took in Siera's 16 year old friend,Angela,who has lived with them ever since.The Dasrup's have not legally adopted Angela but Siera often refers to Angela as "her sister." The Dasrup's provide all of the support for both girls,neither girl receives any income during the year,and both girls live at the Dasrup's residence.Which of the following statements is true regarding who Char and Russ may claim as dependents for the current year?

Accepted Answer

A) They may claim Siera as a dependent qualifying child they are not allowed to claim Angela as a dependent. 
B) They may claim Siera as a dependent qualifying child and they may claim Angela as a dependent qualifying child. 
C) They may claim Siera as a dependent qualifying child and they may claim Angela as a dependent qualifying relative. 
D) None of these statements is true.

Question 2

Which of the following is not a filing status?

Accepted Answer

A) Head of household. 
B) Unmarried. 
C) Qualifying widow or widower. 
D) Married filing jointly.

Question 3

For purposes of determining filing status,which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

Accepted Answer

A) The taxpayer claims a child as a dependent. 
B) The taxpayer pays more than half the costs of maintaining his or her home for the entire year and the home is the principal residence for a dependent qualifying child for more than half the year. 
C) The taxpayer files a tax return separate from the other spouse. 
D) The spouse does not live in the taxpayer's home at all during the year.

Question 4

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?

Accepted Answer

A) $60,000. 
B) $65,000. 
C) $95,000. 
D) $90,000.

Question 5

Jamison's gross tax liability is $7,000.Jamison had $2,000 of available credits and he had $4,000 of taxes withheld by his employer.What is Jamison's taxes due (or taxes refunded)with his tax return?

Accepted Answer

A) $5,000 taxes due. 
B) $1,000 taxes due. 
C) $1,000 tax refund. 
D) $3,000 taxes due.

Question 6

The standard deduction amount varies by filing status.

Accepted Answer

A) True 
 B)False

Question 7

Tom Suzuki's tax liability for the year is $2,450.He had $2,050 of federal income taxes withheld from his paycheck during the year by his employer and has $2,000 in tax credits.What are Tom's taxes due or tax refund for the year?

Accepted Answer

The answer of Tom Suzuki's tax liability for the year...

Question 8

In June of year 1,Jake's wife Darla died.The couple did not have any children and Jake did not remarry in year 1 or year 2.Which is the most favorable filing status for Jake in year 2?

Accepted Answer

A) Married filing separately. 
B) Single. 
C) Head of household. 
D) Qualifying widower.

Question 9

The only from AGI deductions are the standard deduction and itemized deductions.

Accepted Answer

A) True 
 B)False

Question 10

By the end of year 1,Harold and Jamie Allred had been married for 30 years and have filed a joint return every year of their marriage.Their three sons,Jacob,Larry,and Andi,are ages 13,16,and 23 respectively and all live at home and are fully supported by their parents.Andi is employed full time,earning $17,000 in year 1.Who can the Allreds claim as dependents?

Accepted Answer

The answer of By the end of year 1,Harold and...

Question 11

William and Charlotte Collins divorced in November of year 1.William moved out and Charlotte remained in their house with their 10-month-old daughter Autumn.Diana,Charlotte's mother,lived in the home and acted as Autumn's nanny for all of year 1.William provided 70% of Autumn's support,Diana provided 20%,and Charlotte provided 10%.When the time came to file their tax returns for year 1,William,Charlotte,and Diana each wanted to claim Autumn as a dependent.Their respective AGIs for year 1 were $50,000,$35,000,and $52,000.Who has priority to claim Autumn as a dependent?

Accepted Answer

A) William. 
B) Charlotte. 
C) Diana. 
D) They must negotiate amongst themselves.

Question 12

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

Accepted Answer

A) Taxpayers subtract for AGI deductions from gross income to determine AGI. 
B) A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's standard deduction amount. 
C) The deduction for qualified business income is a for AGI deduction. 
D) A taxpayer may deduct for AGI deductions only if the deductions exceed the taxpayer's itemized deductions.

Question 13

In June of year 1,Eric's wife Savannah died.Eric did not remarry during year 1,year 2,or year 3.Eric maintains the household for his dependent daughter Catherine in year 1,year 2,and year 3.Which is the most advantageous filing status for Eric in year 2?

Accepted Answer

A) Head of household. 
B) Qualifying widower. 
C) Single. 
D) Married filing separately.

Question 14

Sullivan's wife Susan died four years ago.Sullivan has not remarried and he maintains a home for his dependent child Sammy.In 2018,Sullivan received $70,000 of salary from his employer,$3,000 of qualified business income from a business investment and he paid $10,000 of itemized deductions.What is Sullivan's taxable income for 2018?

Accepted Answer

The answer of Sullivan's wife Susan died four years ago.Sullivan...

Question 15

Katy has one child,Dustin,who is 18 years old at the end of the year.Dustin lived at home for three months during the year before leaving home to work full-time in another city.During the year,Dustin earned $15,000.Katy provided more than half of Dustin's support for the year.Which of the following statements regarding whether Katy may claim Dustin as a dependent for the current year is accurate?

Accepted Answer

A) Yes,Dustin is a qualifying child of Katy. 
B) Yes,Dustin fails the residence test for a qualifying child but he is considered a qualifying relative of Katy. 
C) No,Dustin fails the support test for a qualifying relative. 
D) No,Dustin fails the gross income test for a qualifying relative.

Question 16

In certain circumstances,a taxpayer who provides less than half the support of another may still be able to claim that person as a dependent as a qualifying relative.

Accepted Answer

A) True 
 B)False

Question 17

Catherine de Bourgh has one child,Anne,who is 18 years old at the end of the year.Anne lived at home for seven months during the year before leaving home to attend State University for the rest of the year.During the year,Anne earned $6,000 while working part time.Catherine provided 80 percent of Anne's support and Anne provided the rest.Which of the following statements regarding whether Anne is Catherine's qualifying child for the current year is correct?

Accepted Answer

A) Anne is a qualifying child of Catherine. 
B) Anne is not a qualifying child of Catherine because she fails the gross income test. 
C) Anne is not a qualifying child of Catherine because she fails the residence test. 
D) Anne is not a qualifying child of Catherine because she fails the support test.

Question 18

The Dashwoods have calculated their taxable income to be $88,000 for 2018,which includes $2,000 of long-term capital gains.Using the appropriate tax rate schedule,calculate the Dashwood's income tax liability assuming they are married and file a joint return.

Accepted Answer

The answer of The Dashwoods have calculated their taxable income...

Question 19

Charles,who is single,pays all of the costs of maintaining a home for himself and Damarcus.Charles and Damarcus have no family relationship but Damarcus lives with Charles for the entire year.Damarcus qualifies as a qualifying relative for Charles (Charles claims Demarcus as a dependent on his tax return).Charles qualifies for head of household filing status.

Accepted Answer

A) True 
 B)False

Question 20

The character of income is a factor in determining the rate at which the income is taxed.

Accepted Answer

A) True 
 B)False

Exam 4: Individual Income Tax Overview dependents and Filing Status

Which of the following is not a filing status?

For purposes of determining filing status,which of the following is not a requirement for a married taxpayer to be treated as unmarried at the end of the year?

Jamison's gross tax liability is $7,000.Jamison had $2,000 of available credits and he had $4,000 of taxes withheld by his employer.What is Jamison's taxes due (or taxes refunded) with his tax return?

The standard deduction amount varies by filing status.

Tom Suzuki's tax liability for the year is $2,450.He had $2,050 of federal income taxes withheld from his paycheck during the year by his employer and has $2,000 in tax credits.What are Tom's taxes due or tax refund for the year?

In June of year 1,Jake's wife Darla died.The couple did not have any children and Jake did not remarry in year 1 or year 2.Which is the most favorable filing status for Jake in year 2?

The only from AGI deductions are the standard deduction and itemized deductions.

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

In June of year 1,Eric's wife Savannah died.Eric did not remarry during year 1,year 2,or year 3.Eric maintains the household for his dependent daughter Catherine in year 1,year 2,and year 3.Which is the most advantageous filing status for Eric in year 2?

In certain circumstances,a taxpayer who provides less than half the support of another may still be able to claim that person as a dependent as a qualifying relative.

The Dashwoods have calculated their taxable income to be $88,000 for 2018,which includes $2,000 of long-term capital gains.Using the appropriate tax rate schedule,calculate the Dashwood's income tax liability assuming they are married and file a joint return.

The character of income is a factor in determining the rate at which the income is taxed.