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Match the statements that relate to each other. Note: Choice l. may be used more than once. -Nonresident alien


A) Available to a 70-year-old father claimed as a dependent by his son.
B) Equal to tax liability divided by taxable income.
C) The highest income tax rate applicable to a taxpayer.
D) Not eligible for the standard deduction.
E) No one qualified taxpayer meets the support test.
F) Taxpayer's ex-husband does not qualify.
G) A dependent child (age 18) who has only unearned income.
H) Highest applicable rate is 39.6%.
I) Applicable rate could be as low as 0%.
J) Maximum rate is 28%.
K) Income from foreign sources is not subject to tax.
L) No correct match provided.

M) D) and J)
N) B) and D)

Correct Answer

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Regarding dependency exemptions, classify each statement in one of the four categories: -An uncle who lives with taxpayer.


A) Could be a qualifying child.
B) Could be a qualifying relative.
C) Could be either a qualifying child or a qualifying relative.
D) Could be neither a qualifying child nor a qualifying relative.

E) A) and C)
F) None of the above

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


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 these.

F) C) and E)
G) C) and D)

Correct Answer

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The major advantage of being classified as an abandoned spouse is that the taxpayer is treated for tax purposes as being single and not married. This means that an abandoned spouse can use the more favorable tax rates available to single persons than those available to married persons filing separately. Comment on the accuracy of this conclusion.

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The conclusion is incorrect. The classif...

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Stealth taxes are directed at lower income taxpayers.

A) True
B) False

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Lucas, age 17 and single, earns $6,000 during 2016. Lucas's parents cannot claim him as a dependent if he does not live with them.

A) True
B) False

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

A) True
B) False

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Regarding dependency exemptions, classify each statement in one of the four categories: -An ex-husband (divorce occurred last year) who lives with taxpayer.


A) Could be a qualifying child.
B) Could be a qualifying relative.
C) Could be either a qualifying child or a qualifying relative.
D) Could be neither a qualifying child nor a qualifying relative.

E) A) and D)
F) B) and D)

Correct Answer

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In meeting the criteria of a qualifying child for dependency exemption purposes, when if ever, might the child's income become relevant?

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The amount of income earned by the quali...

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Regarding head of household filing status, comment on the following: a.A taxpayer qualifies even though he maintains a household which he and the dependent do not share. b.A taxpayer does not qualify even though the person sharing the household is a dependent. c.The usual eventual filing status of a surviving spouse.

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During 2016, Sarah had the following transactions: Sarah's AGI is: During 2016, Sarah had the following transactions: Sarah's AGI is: A) $185,000. B) $187,000. C) $285,000. D) $287,000. E) $387,000.


A) $185,000.
B) $187,000.
C) $285,000.
D) $287,000.
E) $387,000.

F) A) and D)
G) B) and E)

Correct Answer

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In 2016, Tom is single and has AGI of $50,000. He is age 70, has no dependents, and has itemized deductions (i.e., from AGI) of $7,000. Determine Tom's taxable income for 2016.

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$38,100. Tom's standard deduction is $6,...

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Roy and Linda were divorced in 2015. The divorce decree awards custody of their children to Linda but is silent as to who is entitled to claim them as dependents. If Roy furnished more than half of their support, he can claim them as dependents in 2016.

A) True
B) False

Correct Answer

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Match the statements that relate to each other. Note: Choice l. may be used more than once. -Average income tax rate


A) Available to a 70-year-old father claimed as a dependent by his son.
B) Equal to tax liability divided by taxable income.
C) The highest income tax rate applicable to a taxpayer.
D) Not eligible for the standard deduction.
E) No one qualified taxpayer meets the support test.
F) Taxpayer's ex-husband does not qualify.
G) A dependent child (age 18) who has only unearned income.
H) Highest applicable rate is 39.6%.
I) Applicable rate could be as low as 0%.
J) Maximum rate is 28%.
K) Income from foreign sources is not subject to tax.
L) No correct match provided.

M) G) and L)
N) B) and E)

Correct Answer

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Match the statements that relate to each other. Note: Choice l. may be used more than once. -Multiple support agreement


A) Available to a 70-year-old father claimed as a dependent by his son.
B) Equal to tax liability divided by taxable income.
C) The highest income tax rate applicable to a taxpayer.
D) Not eligible for the standard deduction.
E) No one qualified taxpayer meets the support test.
F) Taxpayer's ex-husband does not qualify.
G) A dependent child (age 18) who has only unearned income.
H) Highest applicable rate is 39.6%.
I) Applicable rate could be as low as 0%.
J) Maximum rate is 28%.
K) Income from foreign sources is not subject to tax.
L) No correct match provided.

M) A) and E)
N) B) and G)

Correct Answer

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Match the statements that relate to each other. Note: Choice l. may be used more than once. -$1,050


A) Not available to 65-year old taxpayer who itemizes.
B) Exception for U.S. citizenship or residency test (for dependency exemption purposes) .
C) Largest basic standard deduction available to a dependent who has no earned income.
D) Considered for dependency exemption purposes.
E) Qualifies for head of household filing status.
F) A child (age 15) who is a dependent and has only earned income.
G) Considered in applying gross income test (for dependency exemption purposes) .
H) Not considered in applying the gross income test (for dependency exemption purposes) .
I) Unmarried taxpayer who can use the same tax rates as married persons filing jointly.
J) Exception to the support test (for dependency exemption purposes) .
K) A child (age 16) who is a dependent and has only unearned income of $4,500.
L) No correct match provided.

M) B) and D)
N) C) and D)

Correct Answer

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For tax purposes, married persons filing separate returns are treated the same as single taxpayers.

A) True
B) False

Correct Answer

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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.

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Gifts and inheritances are exclusions fr...

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Many taxpayers who previously itemized will start claiming the standard deduction when they purchase a home.

A) True
B) False

Correct Answer

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In determining the filing requirement based on gross income received, both additional standard deductions (i.e., age and blindness) are taken into account.

A) True
B) False

Correct Answer

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