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Exam 9: Individuals As the Taxpayer

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Question 41

True/False

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When separate income tax returns are filed by married taxpayers, one spouse cannot claim the other spouse as a dependent.

A) True
B) False

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Question 42

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Match the statements that relate to each other.Note: Some choices may be used more than once. 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 in 2019. d.Considered for dependency 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. -Kiddie tax does not apply

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Question 43

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

The basic and additional standard deductions both are subject to an annual adjustment for inflation.

Debby, age 18, is claimed as a dependent by her mother.During 2019, Debby earned $1,200 in interest income on a savings account.Her standard deduction is $1,550 ($1,200 + $350).

Match the statements that relate to each other.Note: Choice k.may be used more than once. 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 37%. i.Applicable rate could be as low as 0%. j.Maximum rate is 28%. k.No correct match provided. -Gain on collectibles (held more than one year)

Hannah, age 70 and single, is claimed as a dependent by her daughter.During 2019, Hannah had interest income of $2,550 and $850 of earned income from babysitting.Hannah's taxable income is:

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

In terms of the tax formula applicable to individual taxpayers, which of the following statements, if any, is correct?

Once a child reaches age 19, the kiddie tax no longer applies.

Benjamin, age 16, is claimed as a dependent by his parents.During 2019, he earned $850 at a car wash.Benjamin's standard deduction is $1,450 ($1,100 + $350).

Match the statements that relate to each other.Note: Some choices may be used more than once. 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 in 2019. d.Considered for dependency 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. -Scholarship funds for tuition

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

Which of the statements regarding the standard deduction, if any, is correct?

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 2019 is $28,300 ($24,400 + $1,300 + $1,300 + $1,300).

Match the statements that relate to each other.Note: Some choices may be used more than once. 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 in 2019. d.Considered for dependency 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. -Multiple support agreement

Matching Regarding classification as a dependent, classify each statement in one of the four categories: 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. -A niece who lives with taxpayer, is 20 years old, earns $5,000, and is a full-time student.

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.

After her divorce, Hope continues to support her ex-husband's sister, Cindy, who does not live with her.Hope can claim Cindy as a dependent.

Married taxpayers who file a joint return cannot later (i.e., after the filing due date) switch to separate returns for that year.