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Exam 9: Individuals As the Taxpayer

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Question 21

True/False

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When the kiddie tax applies and the parents are divorced,the applicable parent (for determining the parental tax)is the one with the greater taxable income.

A) True
B) False

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Question 22

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Monique is a resident of the U.S.and a citizen of France.If she files a U.S.income tax return,Monique cannot claim the standard deduction.

A) True
B) False

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Question 23

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

If an individual does not spend funds that have been received from another source (e.g. ,interest on municipal bonds),the unexpended amounts are not considered for purposes of the support test.

All exclusions from gross income are reported on Form 1040.

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

For the past few years,Corey's filing status has been as follows: 2011 (married/joint);2012 (married/separate);2013 (surviving spouse);2014 (surviving spouse);and 2015 (head of household).Explain what probably has happened.

Ellen,age 12,lives in the same household with her father,grandfather,and uncle.The cost of maintaining the household is provided by her grandfather (40%) and her uncle (60%) .Disregarding tie-breaker rules,Ellen is a qualifying child as to:

Regarding the tax formula and its relationship to Form 1040,which,if any,of the following statements is correct?

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

In satisfying the support test and the gross income test for claiming a dependency exemption,a scholarship received by the person being claimed is handled the same way for each test.Do you agree or disagree with this statement? Why?

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

A dependent cannot claim a personal exemption on his or her own return.

Katrina,age 16,is claimed as a dependent by her parents.During 2015,she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,950 ($5,600 earned income + $350).

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 2015 is $16,350 ($12,600 + $1,250 + $1,250 + $1,250).

Arnold is married to Sybil,who abandoned him in 2014.He has not seen or communicated with her since April of that year.He maintains a household in which their son,Evans,lives.Evans is age 25 and earns over $6,000 each year.For tax year 2015,Arnold's filing status is:

When married persons file a joint return,joint and several liability results.What does this mean?

Merle is a widow,age 80 and blind,who is claimed as a dependent by her son.During 2015,she received $4,800 in Social Security benefits,$2,500 in bank interest,and $1,800 in cash dividends from stocks.Merle's taxable income is:

Stealth taxes are directed at lower income taxpayers.

Lee,a citizen of Korea,is a resident of the U.S.Any rent income Lee receives from land he owns in Korea is not subject to the U.S.income tax.