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

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Question 41

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An individual may never be considered as both a qualifying relative and a qualifying child of the same taxpayer.

A) True
B) False

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Question 42

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In certain circumstances, a married taxpayer who does not file a joint tax return with her spouse may qualify for the head of household filing status.

A) True
B) False

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Question 43

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The relationship test for qualifying relative requires the potential qualifying relative to have a family relationship with the taxpayer.

The income tax base for an individual tax return is:

A taxpayer may qualify for the head of household filing status if she has no dependent children but pays more than half of the cost of maintaining a separate household for her dependent mother and/or father.

All of the following are tests for determining qualifying relative status except ________.

Kabuo and Melinda got married on December 15, Year 1.Kabuo's salary for the year was $54,000, and Melinda's was $62,000.In addition, Kabuo received $250 of interest income, ($100 of which was from municipal bonds), and Melinda received $10,000 of alimony from a former spouse (pre-2019 divorce decree).If Kabuo and Melinda choose to file jointly, what is their Year 1 gross income?

An individual receiving $5,000 of tax-exempt income during the year could qualify as a qualifying child of another taxpayer but could not qualify as a qualifying relative of another taxpayer.

For AGI deductions are commonly referred to as deductions "above the line."

To determine filing status, a taxpayer's marital status is determined on January 1 of each tax year in question.

William and Charlotte Collins divorced in November of Year 1.William moved out and Charlotte remained in their house with their 10-month-old daughter, Autumn.Diana, Charlotte's mother, lived in the home and acted as Autumn's nanny for all of Year 1.William provided 70 percent of Autumn's support, Diana provided 20 percent, and Charlotte provided 10 percent.When the time came to file their tax returns for Year 1, William, Charlotte, and Diana each wanted to claim Autumn as a dependent.Their respective AGIs for Year 1 were $50,000, $35,000, and $52,000.Who has priority to claim Autumn as a dependent?

Katy has one child, Dustin, who is 18 years old at the end of the year.Dustin lived at home for three months during the year before leaving home to work full time in another city.During the year, Dustin earned $15,000.Katy provided more than half of Dustin's support for the year.Which of the following statements regarding whether Katy may claim Dustin as a dependent for the current year is accurate?

Sally received $60,000 of compensation from her employer and she received $500 of interest from a corporate bond.What is the amount of Sally's gross income from these items?

Itemized deductions and the standard deduction are deductions from AGI but the deduction for qualified business income is a deduction for AGI.

Which of the following shows the correct relationship among standard deduction amounts for the respective filing statuses?

Which of the following statements regarding realized income is true?

Jane and Ed Rochester are married with a 2-year-old child, who lives with them and whom they support financially.In 2019, Ed and Jane realized the following items of income and expense: $\begin{array} { l r } \text { Item}&\text { Amount } \\\text { Ed's Salary } & 35,000\\\text { Jarie's Salary } & 70,000 \\\text { Muricipal bond interest income } &400 \\\text { Qualified business income } & 1,000 \\\text { Alimony paid for AGI deduction) } &( 7,000 ) \\\text { Real property tax (from AGI deduction) } & ( 10,000 ) \\\text { Charitable contributions (from AGI) } &( 15,000 ) \\\end{array}$ They also qualified for a $2,000 child tax credit.Their employers withheld $5,800 in federal income taxes from their paychecks (in the aggregate).Finally, the 2019 standard deduction amount for MFJ taxpayers is $24,400. What is the couple's gross income?

To be considered a qualifying child of a taxpayer, the individual must be the son or daughter of the taxpayer.

Jeremy and Annie are married.During the year Jeremy dies.When Annie files her tax return for the year in which her husband dies, she may file under the married filing jointly filing status even if she does not remarry.

Which of the following relationships does NOT pass the relationship test for a qualifying child?