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Exam 3: Computing the Tax

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Question 41

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An increase in a taxpayer's AGI could decrease the amount of charitable contribution that can be claimed.

A) True
B) False

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Question 42

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In 2017,Ashley earns a salary of $55,000,has capital gains of $3,000,and receives interest income of $5,000.Her husband died in 2016.Ashley has a dependent son,Tyrone,who is age 8.Her itemized deductions are $9,000. a.What is her filing status? b.Calculate Ashley's taxable income for 2017.

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Question 43

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Roy and Linda were divorced in 2016.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 2017.

Regarding dependency exemptions, 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 son lives with taxpayer and earns $3,000.

Stealth taxes are directed at lower income taxpayers.

The additional standard deduction for age and blindness is greater for married taxpayers than for single taxpayers.

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

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.

Nelda is married to Chad,who abandoned her in early June of 2017.She has not seen or communicated with him since then.She maintains a household in which she and her two dependent children live.Which of the following statements about Nelda's filing status in 2017 is correct?

Surviving spouse filing status begins in the year in which the deceased spouse died.

A taxpayer who itemizes must use Form 1040,and cannot use Form 1040EZ or Form 1040A.

Buddy and Hazel are ages 72 and 71 and file a joint return.If they have itemized deductions of $14,600 for 2017,they should not claim the standard deduction.

Pedro is married to Consuela,who lives with him.Both are U.S.citizens and residents of Nebraska.Pedro furnishes all of the support of his parents,who are citizens and residents of Mexico.He also furnishes all of the support of Consuela's parents,who are citizens and residents of El Salvador.Consuela has no gross income for the year.If Pedro files as a married person filing separately,how many personal and dependency exemptions can he claim on his return?

Using borrowed funds from a mortgage on her home,Leah provides 52% of her own support,while her sons furnished the rest.Leah can be claimed as a dependent under a multiple support agreement.

Regarding dependency exemptions, 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 stepdaughter who does not live with taxpayer.

Sylvia,age 17,is claimed by her parents as a dependent.During 2017,she had interest income from a bank savings account of $2,000 and income from a part-time job of $4,200.Sylvia's taxable income is:

In 2017,Cindy had the following transactions: Cindy's AGI is:

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.

Arnold is married to Sybil,who abandoned him in 2016.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 2017,Arnold's filing status is:

Regarding dependency exemptions, 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 nephew who lives with taxpayer.