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Exam 4: Individual Tax Overview

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Question 51

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The standard deduction amount varies by filing status.

A) True
B) False

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Question 52

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Filing status determines all of the following except ____________

A) the applicable standard deduction amount.
B) the appropriate tax rate schedule or tax table.
C) the standard amount of each personal and dependency exemption.
D) the AGI threshold for reductions in certain tax benefits.The standard amount of each personal and dependency exemption does not vary by filing status.

E) A) and D)
F) C) and D)

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Question 53

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Jeremy and Annie are married.During the year Jeremy dies.When Annie files her tax return for the year in which her husband dies,she may file under the married filing jointly filing status even if she does not remarry.

If a taxpayer does not provide more than half the support of an individual,that individual cannot qualify as the taxpayer's qualifying child.

The income tax base for an individual tax return is

For AGI deductions are commonly referred to as deductions "below the line."

Michael,Diane,Karen,and Kenny provide support for their mother Janet who is 75 years old.Janet lives by herself in an apartment in Los Angeles.Janet's gross income for the year is $3,000.Janet provides 10% of her own support,Michael provides 40% of Janet's support,Diane provides 8% of Janet's support,Karen provides 10% of Janet's support,and Kenny provides the remaining 32% of Janet's support.Under a multiple support agreement,who may claim a dependency exemption for Janet as a qualifying relative?

If an unmarried taxpayer is able to claim a dependency exemption for another individual,the taxpayer is automatically eligible for the head of household filing status.

All of the following are tests for determining qualifying child status except the ______.

A personal automobile is a capital asset.

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?

Bonnie and Ernie file a joint return.Bonnie works and receives income during the year but Ernie does not.If the couple files a joint tax return,Ernie is responsible for paying any taxes due if Bonnie is unable to pay the taxes.

Jane is unmarried and has no children,but provides more than half of her mother's financial support.Jane's mother lives in an apartment across town and has a part-time job earning $5,000 a year.Which is the most advantageous filing status available to Jane?

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?

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

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?

For AGI deductions are commonly referred to as deductions "above the line."

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 an exemption for Jane in year 1 assuming the neighbor pays for all of Jane's support?

Taxpayers are generally allowed to claim deductions for expenditures unless a specific tax provision indicates the expenditure is not deductible.In contrast to the all-inclusive treatment of income,taxpayers are not allowed to deduct anything unless a specific tax provision allows them to do so.

If no one qualifies as the dependent of an unmarried taxpayer,the unmarried taxpayer may still be able to qualify for the head of household filing status.