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| 1 | |
Income-related items are excluded from gross income unless specifically included by a provision in the tax code. |
| | A) | True |
| | B) | False |
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| 2 | |
The personal exemption amount is greater than the dependency exemption amount. |
| | A) | True |
| | B) | False |
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| 3 | |
In prior years, John was single and he was a qualifying child of his parents. This year John, age 23 and a full-time student, got married. John and his wife file a joint return. If they were to file separately, John would report a $0 tax liability. John's wife would report a $200 tax liability. John's parents cannot claim him as a dependent in the current year. |
| | A) | True |
| | B) | False |
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| 4 | |
A temporary absence from the taxpayer's home for full-time schoolwork by the child may cause the child to fail the qualifying child residence test. |
| | A) | True |
| | B) | False |
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| 5 | |
For purposes of determining filing status, a taxpayer's marital status is determined on the last day of the tax year in question. |
| | A) | True |
| | B) | False |
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| 6 | |
If spouses are filing separate returns, both spouses must itemize their deductions even if the itemized deductions are less than the standard deduction for one of the spouses. |
| | A) | True |
| | B) | False |
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| 7 | |
Trudy and Ben file a joint return. Trudy's reported income creates $200 of income tax and Ben's reported income creates $180 of income tax. In addition to the reported income, Trudy has unreported income on which she owes $50 of income tax. How much of the $430 potential tax liability is Ben liable for? |
| | A) | $50 |
| | B) | $180 |
| | C) | $380 |
| | D) | $430 |
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| 8 | |
James received $25,000 of compensation from his employer and he received $1,900 of interest from a municipal bond. What is the amount of James's gross income? |
| | A) | $0 |
| | B) | $1,900 |
| | C) | $25,000 |
| | D) | $26,900 |
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| 9 | |
Which of the following is from AGI deduction? |
| | A) | Moving expenses |
| | B) | Rental and royalty expenses. |
| | C) | Business expenses |
| | D) | Charitable contributions |
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| 10 | |
Which of the following is not an itemized deduction? |
| | A) | Personal casualty losses |
| | B) | Medical expenses |
| | C) | Personal property taxes |
| | D) | Charitable contributions |
| | E) | None of the above |
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| 11 | |
Sarah is the Colton family's 23-year-old daughter. She is a full-time student at an out-of-state university (for 8 months of the year) but plans to return home when the school year ends. During the year, Sarah earned $4,500 of income working part-time. Her support totaled $20,000 for 2013. Of this amount, Sarah paid $7,000 with her own funds, her parents paid $12,000, and Sarah's grandparents paid $1,000. Which of the following statements most accurately describes whether Sarah's parents can claim a dependency exemption for her? |
| | A) | Yes, Sarah is a qualifying child of her parents. |
| | B) | No, Sarah fails the support test for both qualifying children and qualifying relatives. |
| | C) | No, Sarah does not pass the gross income test. |
| | D) | Yes, Sarah is a qualifying relative of her parents. |
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| 12 | |
Filing status determines all except which of the following? |
| | A) | the AGI threshold for reductions in certain tax benefits |
| | B) | the standard amount of each personal and dependency exemption |
| | C) | the appropriate tax rate schedule or tax table |
| | D) | the applicable standard deduction amount |
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| 13 | |
In May of year 1, David left his wife Juliette. While the couple was apart, they were not legally divorced. Juliette found herself having to financially provide for the couple's only child and to pay all the costs of maintaining the household. When Juliette filed her tax return for year 1, she filed a return separate from David. What is Juliette's most favorable filing status for year 1? |
| | A) | Head of household |
| | B) | Single |
| | C) | Married filing separately |
| | D) | Qualifying widow |
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| 14 | |
In 2012, Danny's wife died. Danny has no dependents. As of the end of 2013, Danny had not remarried. Which is the most advantageous filing status available to Danny in 2013? |
| | A) | Married filing joint |
| | B) | Surviving spouse |
| | C) | Married filing separate |
| | D) | Single |
| | E) | Head of household |
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| 15 | |
Caroline and her husband Chris got divorced in May of this year. During the year, Caroline provided all the support for herself and her 23-year-old child Hans (not a full-time student) who lived in the same home as Caroline for the entire year. Hans earned $29,000 this year. What is the Caroline's most favorable filing status for the year? |
| | A) | Head of household |
| | B) | Married filing separately |
| | C) | Surviving spouse |
| | D) | Single |
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