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Exam 9: Individuals As the Taxpayer

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Question 51

True/False

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

A) True
B) False

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Question 52

Multiple Choice

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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:

A) Only her father.
B) Only her grandfather and uncle.
C) Only her uncle.
D) All parties involved i.e., father, grandfather, and uncle) .
E) None of these.

F) A) and E)
G) A) and D)

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Question 53

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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.

Debby, age 18, is claimed as a dependent by her mother.During 2018, she earned $1,100 in interest income on a savings account.Debby's standard deduction is $1,450 $1,100 + $350).

Natalie is married to Chad, who abandoned her in early June of 2018.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 Natalie's filing status in 2018 is correct?

Which, if any, of the following is a deduction for AGI?

If the AMT base is greater than $191,100, the AMT rate for an individual taxpayer is the same as the AMT rate for married taxpayer, filing jointly.

Joel placed real property in service in 2018 that cost $900,000 and used MACRS depreciation for regular income tax purposes.He is required to make a positive adjustment for AMT purposes in 2018 for the excess of depreciation calculated for regular income tax purposes over the depreciation calculated for AMT purposes.

In 2018, a child who has unearned income of $2,100 or less cannot be subject to the kiddie tax.

In deciding whether to enact the alternative minimum tax, Congress was concerned about the inequity that resulted when taxpayers with substantial economic incomes could avoid paying regular income tax.

The additional Medicare taxes assessed on high-income individuals carry differing tax rates depending on the tax base.

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.

Kim, a resident of Oregon, supports his parents who are residents of Canada but citizens of Korea.Kim can claim a dependent tax credit for his parents.

Darren, age 20 and not disabled, earns $4,300 during 2018.Darren's parents cannot claim him as a dependent unless he is a full-time student.

An individual taxpayer uses a fiscal year of March 1 to February 28.The due date of this taxpayer's Federal income tax return is May 15 of each tax year.

The deduction for personal and dependency exemptions has been suspended from 2018 through 2025.

Madge's tentative minimum tax TMT) is $112,000.Her regular income tax liability is $99,000.Madge's AMT is $13,000.

Which, if any, of the following is a correct statement relating to the kiddie tax in 2018?

Butch and Minerva are divorced in December of 2018.Since they were married for more than one-half of the year, they are considered as married for 2018.

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.