Question 1

Which of the following is NOT a from AGI deduction?

Accepted Answer

A)  Standard deduction.
B)  Itemized deduction.
C)  Personal exemption.
D)  None of these.All of these are from AGI deductions.E) A) and D)
F) All of the above

Question 2

The relationship requirement is more broadly defined (includes more relationships) for a qualifying relative than it is for a qualifying child.

Accepted Answer

A) True 
 B)False

Question 3

Mason and his wife Madison have been married for five years. Jaxon, who is 18 years old and unrelated to Mason and Madison, has been living with Mason and Madison for the last two years. In May of year 1, Mason and Madison divorced. Mason and Jaxon stayed in the home and Madison moved out. During year 2, Mason provided all of Jaxon's support and Jaxon lived in the home for all of year 2. Jaxon did not earn any income during year 2. What is Mason's most favorable filing status for year 2?

Accepted Answer

A)  Single.
B)  Married filing separately.
C)  Surviving spouse.
D)  Head of householD.While Jaxon qualifies as Mason's dependent for year 2 as a qualifying relative, Jaxon is not related to Mason through a qualified family relationship (he would not be considered a related party if he had not lived with Mason for the entire year) .Consequently, Mason may not qualify for head of household status and he must file as a single taxpayer.E) A) and B)
F) A) and D) A

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

Question 5

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

Accepted Answer

A)  Gross income ≥ adjusted gross income ≥ taxable income
B)  Adjusted gross income ≥ gross income ≥ taxable income
C)  Adjusted gross income ≥ taxable income ≥ gross income
D)  Gross income ≥ taxable income ≥ adjusted gross incomeE) C) and D)
F) A) and B)

Question 6

Which of the following is not an itemized deduction?

Accepted Answer

A)  Alimony paid.
B)  Medical expenses.
C)  Real estate taxes.
D)  Charitable contributions.E) None of the above
F) All of the above

Question 7

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

Accepted Answer

A)  gross income test
B)  age test
C)  support test
D)  residence testE) A) and D)
F) A) and B)

Question 8

Which of the following statements regarding tax deductions is false?

Accepted Answer

A)  Taxpayers are not entitled to any deductions unless specific provisions in the tax code allow the deductions.
B)  Deductions can be labeled as deductions above the line or deductions below the line.
C)  From AGI deductions tend to be associated with business activities while for AGI deductions tend to be associated with personal activities.
D)  The standard deduction is a from AGI deduction.E) B) and C)
F) C) and D)

Question 9

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?

Accepted Answer

A)  No, Jane must include her neighbor's gift as income and thus fails the gross income test for a qualifying relative.
B)  Yes, because she is a full-time student and does not provide more than half of her own support, Jane is considered her parent's qualifying child.
C)  No, Jane is too old to be considered a qualifying child and fails the support test of a qualifying relative.
D)  Yes, because she is a student, her absence is considered as "temporary." Consequently she meets the residence test and is a considered a qualifying child of the Bennetts.E) B) and C)
F) A) and C)

Question 10

Eric and Josephine were married in year 1. In year 2, Eric dies. The couple did not have any children. Assuming Josephine does not remarry, she may file as a qualifying widow in year 3.

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False  False

Question 12

Which of the following statements regarding personal and dependency exemptions is true?

Accepted Answer

A)  To qualify as a dependent of another, an individual must be a resident of the United States.
B)  To qualify as a dependent of another, an individual may not file a joint return with the individual's spouse under any circumstance.
C)  To qualify as a dependent of another, an individual must have a family relationship with the other person.
D)  To qualify as a dependent of another, an individual must be either a qualifying child or a qualifying relative of the other person.E) C) and D)
F) B) and D)

Question 13

Inventory is a capital asset.

Accepted Answer

A) True 
 B)False

Question 14

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.

Accepted Answer

A) True 
 B)False

Question 15

From AGI deductions are generally more valuable to taxpayers than for AGI deductions.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements regarding exemptions is correct?

Accepted Answer

A)  Personal exemptions are more valuable than dependency exemptions.
B)  Taxpayers filing a married filing joint return are limited to two exemptions on their tax returns.
C)  Exemption amounts are considered to be for AGI deductions.
D)  Taxpayers subtract exemption deductions from adjusted gross income in determining taxable incomE.Exemptions are considered to be from AGI deductions.E) A) and B)
F) A) and C)

Question 17

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.E) A) and B)
F) None of the above B

Question 18

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.E) A) and C)
F) B) and D)

Question 19

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

$1,600 tax...

Question 20

Taxpayers who file as qualifying widows/widowers are treated exactly the same for tax purposes in all respects as taxpayers who are married filing jointly for tax purposes.

Accepted Answer

A) True 
 B)False

Exam 4: Individual Income Tax Overview, Exemptions, and Filing Status

Which of the following is NOT a from AGI deduction?

Correct Answer
verified

The relationship requirement is more broadly defined (includes more relationships) for a qualifying relative than it is for a qualifying child.

Correct Answer
verified

Correct Answer
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A

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

Correct Answer
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Which of the following is not an itemized deduction?

Correct Answer
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All of the following are tests for determining qualifying child status except the _____.

Correct Answer
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Which of the following statements regarding tax deductions is false?

Correct Answer
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Correct Answer
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Eric and Josephine were married in year 1. In year 2, Eric dies. The couple did not have any children. Assuming Josephine does not remarry, she may file as a qualifying widow in year 3.

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

Correct Answer
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False

Which of the following statements regarding personal and dependency exemptions is true?

Correct Answer
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Inventory is a capital asset.

Correct Answer
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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.

Correct Answer
verified

From AGI deductions are generally more valuable to taxpayers than for AGI deductions.

Correct Answer
verified

Which of the following statements regarding exemptions is correct?

Correct Answer
verified

Correct Answer
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B

Correct Answer
verified

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?

Correct Answer
verified
$1,600 tax...
View Answer

Taxpayers who file as qualifying widows/widowers are treated exactly the same for tax purposes in all respects as taxpayers who are married filing jointly for tax purposes.

Correct Answer
verified

Exam 4: Individual Income Tax Overview, Exemptions, and Filing Status

Which of the following is NOT a from AGI deduction?

Correct AnswerverifiedShow Answer

The relationship requirement is more broadly defined (includes more relationships) for a qualifying relative than it is for a qualifying child.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedA

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following is not an itemized deduction?

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Which of the following statements regarding tax deductions is false?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Eric and Josephine were married in year 1. In year 2, Eric dies. The couple did not have any children. Assuming Josephine does not remarry, she may file as a qualifying widow in year 3.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedFalse

Which of the following statements regarding personal and dependency exemptions is true?

Correct AnswerverifiedShow Answer

Inventory is a capital asset.

Correct AnswerverifiedShow Answer

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.

Correct AnswerverifiedShow Answer

From AGI deductions are generally more valuable to taxpayers than for AGI deductions.

Correct AnswerverifiedShow Answer

Which of the following statements regarding exemptions is correct?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

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?

Correct Answerverified$1,600 tax...View AnswerShow Answer

Taxpayers who file as qualifying widows/widowers are treated exactly the same for tax purposes in all respects as taxpayers who are married filing jointly for tax purposes.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
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Correct Answer
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A

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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False

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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B

Correct Answer
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Correct Answer
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$1,600 tax...
View Answer

Correct Answer
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