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

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Question 51

Multiple Choice

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Which of the following is not an itemized deduction?

A) Alimony paid.
B) Medical expenses.
C) Real estate taxes.
D) Charitable contributions.

E) B) and D)
F) All of the above

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Question 52

True/False

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Charles, who is single, pays all of the costs of maintaining a home for himself and Damarcus.Charles and Damarcus have no family relationship but Damarcus lives with Charles for the entire year.Damarcus qualifies as a qualifying relative of Charles.(Charles claims Damarcus as a dependent on his tax return.)Charles qualifies for head of household filing status.

A) True
B) False

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Question 53

Multiple Choice

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Which of the following statements regarding tax credits is true?

The relationship requirement for qualifying relative includes cousins.

The Tanakas filed jointly in 2019.Their AGI is $120,000.They reported $10,000 of qualified business income and $26,000 of itemized deductions.They also have two dependent qualifying children.The 2019 standard deduction amount for MFJ taxpayers is $24,400.What is the total amount of from AGI deductions they are allowed to claim on their 2019 tax return?

In Year 1, Harold Weston's wife died.Since her death, he has maintained a household for their son, Frank (age 3) , his qualifying child.Which is the most advantageous filing status available to Harold in Year 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) , and 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?

In order to be a qualifying relative of another, an individual's gross income must be less than ________.

The test for qualifying child includes an age restriction but the test for qualifying relative does not.

In certain circumstances, a taxpayer who provides less than half the support of another may still be able to claim that person as a dependent as a qualifying relative.

Taxpayers are allowed to claim a child tax credit for their qualifying children and certain other qualifying dependents.

When determining whether a child meets the qualifying child support test for the child's grandparents, scholarships earned by the child do not count as self-support provided by the child.

Which of the following is NOT a from AGI deduction?

An individual may be considered as a qualifying child of her parents and a qualifying child of her grandparents in the same year.

By the end of Year 1, Harold and Jamie Allred had been married for 30 years and have filed a joint return every year of their marriage.Their three sons, Jacob, Larry, and Andi, are ages 13, 16, and 23, respectively, and all live at home and are fully supported by their parents.Andi is employed full time, earning $17,000 in Year 1.Whom can the Allreds claim as dependents?

Earl and Lawanda Jackson have been married for 15 years.They have no children.Ned, who is an old friend from high school, has been living with the Jacksons during the current year.Which of the following is a true statement regarding whether the Jacksons can claim Ned as a dependent for the current year?

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 remaining five months 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?

Which of the following statements regarding exclusions and/or deferrals is false?

From AGI deductions are commonly referred to as deductions "below the line."

Michael, Diane, Karen, and Kenny provide support for their mother, Janet, who is 75 years old.Janet lives by herself in an apartment in Los Angeles.Janet's gross income for the year is $3,000.Janet provides 10 percent of her own support, Michael provides 40 percent of Janet's support, Diane provides 8 percent of Janet's support, Karen provides 10 percent of Janet's support, and Kenny provides the remaining 32 percent of Janet's support.Under a multiple support agreement, who is eligible to claim Janet as a dependent as a qualifying relative?