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Exam 9: Individuals As the Taxpayer

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Question 21

Multiple Choice

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Harpreet, whose husband died in December 2017, maintains a household in which her dependent mother lives.Which if any) of the following is her filing status for the tax year 2018? Note: Harpreet is the executor of her husband's estate.)

A) Single
B) Married, filing separately
C) Surviving spouse
D) Head of household
E) Married, filing jointly

F) B) and C)
G) A) and E)

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Question 22

Multiple Choice

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Which, if any, of the following is a deduction for AGI?

A) Contributions to a traditional Individual Retirement Account.
B) Child support payments.
C) Funeral expenses.
D) Loss on the sale of a personal residence.
E) Medical expenses.

F) B) and E)
G) None of the above

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Question 23

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Roy and Linda were divorced in 2017.The divorce decree awards custody of their children under age 17) to Linda but is silent as to who is entitled to treat them as dependents for purposes of claiming the child credit.If Roy furnished more than half of their support, he can claim the child tax credit for them in 2018.

In terms of income tax consequences, abandoned spouses are treated the same way as married persons filing separate returns.

A child who is married cannot be subject to the kiddie tax.

Albert buys his mother a TV.For purposes of meeting the support test, Albert cannot include the cost of the TV.

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

An "above the line" deduction refers to a deduction for AGI.

Under the income tax formula, a taxpayer must choose between deductions for AGI and the standard deduction.

In 2018, Ed is 66 and single.If he has itemized deductions of $12,700, he should not claim the standard deduction alternative.

In 2018, Hal furnishes more than half of the support of his ex-wife and her father, both of whom live with him.The divorce occurred in 2017.Hal may claim the father-in-law and the ex-wife as dependents.

If Abby's alternative minimum taxable income exceeds her regular taxable income, she will incur an alternative minimum tax.

Lucas, age 17 and single, earns $6,000 during 2018.Lucas's parents cannot claim him as a dependent if he does not live with them.

The net capital gain included in an individual taxpayer's AMT base is eligible for the lower tax rate on net capital gain.This favorable alternative rate applies both in calculating the regular income tax and the AMT.

For dependents who have income, special filing requirements apply.

Sarah furnishes more than 50% of the support of her son and daughter-in-law who live with her.If the son and daughter-in-law file a joint return, Sarah cannot claim them as dependents.

Adjusted gross income AGI) appears at the bottom of page 1 and at the top of page 2 of Form 1040.

Katrina, age 16, is claimed as a dependent by her parents.During 2018, she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,950 $5,600 earned income + $350).

Evan and Eileen Carter are husband and wife and file a joint return for 2018.Both are under 65 years of age.They provide more than half of the support of their daughter, Pamela age 25) , who is a full-time medical student.Pamela receives a $5,000 scholarship covering her tuition at college.They furnish all of the support of Belinda Evan's grandmother) , who is age 80 and lives in a nursing home.They also support Peggy age 66) , who is a friend of the family and lives with them.How many dependents may the Carters claim?

Jason and Peg are married and file a joint return.Both are over 65 years of age and Jason is blind.Their standard deduction for 2018 is $27,900 $24,000 + $1,300 + $1,300 + $1,300).