Question 1

Millie,age 80,is supported during the current year as follows:  During the year,Millie lives in an assisted living facility.Under a multiple support agreement,indicate which parties can qualify to claim Millie as a dependent.

Accepted Answer

A)   Weston and Faith.
B)   Faith.
C)   Weston, Faith, Jake, and Brayden.
D)   Faith, Jake, and Brayden.
E)   None of the above.F) A) and B)
G) A) and C)

Question 2

Dan and Donna are husband and wife and file separate returns for the year.If Dan itemizes his deductions from AGI,Donna still can claim the standard deduction.

Accepted Answer

A) True 
 B)False

Question 3

In which,if any,of the following situations will the kiddie tax not apply?

Accepted Answer

A)   The child is married but does not file a joint return.
B)   The child has unearned income of $1,900 or less.
C)   The child has unearned income that exceeds more than half of his (or her)  support.
D)   The child is under age 24 and a full-time student.
E)   None of the above.F) None of the above
G) B) and E)

Question 4

When can a taxpayer not use Form 1040EZ? Form 1040A?

Accepted Answer

Form 1040EZ cannot be used when the taxp...

Question 5

In January 2012,Jake's wife dies and he does not remarry.For tax year 2012,Jake may not be able to use the filing status available to married persons filing joint returns.

Accepted Answer

A) True 
 B)False

Question 6

Match the statements that relate to each other.Note: Choice L may be used more than once.

Accepted Answer

The answer of Match the statements that relate to each...

Question 7

Which,if any,of the following statements relating to the standard deduction is correct?

Accepted Answer

A)   If a taxpayer dies during the year, his (or her)  standard deduction must be prorated.
B)   If a taxpayer is claimed as a dependent of another, his (or her)  additional standard deduction is allowed in full (i.e., no adjustment is necessary) .
C)   If spouses file separate returns, both spouses must claim the standard deduction (rather than itemize their deductions from AGI) .
D)   If a taxpayer is claimed as a dependent of another, no basic standard deduction is allowed.
E)   None of the above.F) C) and E)
G) A) and B)

Question 8

A child who has unearned income of $1,900 or less cannot be subject to the kiddie tax.

Accepted Answer

A) True 
 B)False

Question 9

During 2012,Esther had the following transactions:  Esther's AGI is:

Accepted Answer

A)   $62,000.
B)   $64,000.
C)   $67,000.
D)   $102,000.
E)   $104,000.F) None of the above
G) All of the above

Question 10

In 2012,Ed is 66 and single.If he has itemized deductions of $7,300,he should claim the standard deduction alternative.

Accepted Answer

A) True 
 B)False

Question 11

During the current year,Doris received a large gift from her parents and a sizeable inheritance from an uncle.She also paid premiums on an insurance policy on her life.Doris is confused because she cannot find any place on Form 1040 to report these items.Explain.

Accepted Answer

Gifts and inheritances are exclusions fr...

Question 12

The filing status of a taxpayer (e.g.,single,head of household)must be identified before taxable income is determined.

Accepted Answer

A) True 
 B)False

Question 13

In terms of timing as to any one year,the Tax Tables are available before the Tax Rate Schedules.

Accepted Answer

A) True 
 B)False

Question 14

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 15

When filing their Federal income tax returns,the Youngs always claimed the standard deduction.After they purchased a home,however,they started to itemize their deductions from AGI.

Accepted Answer

The answer of When filing their Federal income tax returns,the...

Question 16

Stealth taxes are directed at higher income taxpayers.

Accepted Answer

A) True 
 B)False

Question 17

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.F) All of the above
G) B) and E)

Question 18

Wilma,age 70 and single,is claimed as a dependent on her daughter's tax return.During 2012,she had interest income of $2,400 and $800 of earned income from baby sitting.Wilma's taxable income is:

Accepted Answer

A)   $700.
B)   $850.
C)   $1,800.
D)   $2,250.
E)   None of the above.F) A) and D)
G) B) and E)

Question 19

In terms of the tax formula applicable to individual taxpayers,which,if any,of the following statements is correct?

Accepted Answer

A)   In arriving at AGI, a taxpayer must elect between claiming deductions for AGI and deductions from AGI.
B)   In arriving at taxable income, a taxpayer must elect between claiming deductions for AGI and deductions from AGI.
C)   If a taxpayer has deductions for AGI, the standard deduction is not available.
D)   In arriving at taxable income, a taxpayer must elect between deductions for AGI and the standard deduction.
E)   None of the above.F) A) and B)
G) A) and C)

Question 20

Once a child reaches age 19,the kiddie tax no longer applies.

Accepted Answer

A) True 
 B)False

Exam 3: Tax Formula and Tax Determination: an Overview of Property Transactions

When filing their Federal income tax returns,the Youngs always claimed the standard deduction.After they purchased a home,however,they started to itemize their deductions from AGI.

Correct AnswerverifiedShow Answer

Wilma,age 70 and single,is claimed as a dependent on her daughter's tax return.During 2012,she had interest income of $2,400 and $800 of earned income from baby sitting.Wilma's taxable income is:

Correct AnswerverifiedShow Answer

Once a child reaches age 19,the kiddie tax no longer applies.

Correct AnswerverifiedShow Answer

In January 2012,Jake's wife dies and he does not remarry.For tax year 2012,Jake may not be able to use the filing status available to married persons filing joint returns.

Correct AnswerverifiedShow Answer

In which,if any,of the following situations will the kiddie tax not apply?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which,if any,of the following statements relating to the standard deduction is correct?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

During the current year,Doris received a large gift from her parents and a sizeable inheritance from an uncle.She also paid premiums on an insurance policy on her life.Doris is confused because she cannot find any place on Form 1040 to report these items.Explain.

Correct AnswerverifiedGifts and inheritances are exclusions fr...View AnswerShow Answer

When can a taxpayer not use Form 1040EZ? Form 1040A?

Correct AnswerverifiedForm 1040EZ cannot be used when the taxp...View AnswerShow Answer

In terms of timing as to any one year,the Tax Tables are available before the Tax Rate Schedules.

Correct AnswerverifiedShow Answer

The filing status of a taxpayer (e.g.,single,head of household)must be identified before taxable income is determined.

Correct AnswerverifiedShow Answer

Dan and Donna are husband and wife and file separate returns for the year.If Dan itemizes his deductions from AGI,Donna still can claim the standard deduction.

Correct AnswerverifiedShow Answer

Millie,age 80,is supported during the current year as follows: During the year,Millie lives in an assisted living facility.Under a multiple support agreement,indicate which parties can qualify to claim Millie as a dependent.

Correct AnswerverifiedShow Answer

In terms of the tax formula applicable to individual taxpayers,which,if any,of the following statements is correct?

Correct AnswerverifiedShow Answer

In 2012,Ed is 66 and single.If he has itemized deductions of $7,300,he should claim the standard deduction alternative.

Correct AnswerverifiedShow Answer

Match the statements that relate to each other.Note: Choice L may be used more than once.

Correct AnswerverifiedShow Answer

A child who has unearned income of $1,900 or less cannot be subject to the kiddie tax.

Correct AnswerverifiedShow Answer

Stealth taxes are directed at higher income taxpayers.

Correct AnswerverifiedShow Answer

During 2012,Esther had the following transactions: Esther's AGI is:

Correct AnswerverifiedShow Answer

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Gifts and inheritances are exclusions fr...
View Answer

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Form 1040EZ cannot be used when the taxp...
View Answer

Correct Answer
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