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


A) In arriving at taxable income, a taxpayer must choose between the standard deduction and itemized deductions.
B) In arriving at AGI, personal and dependency exemptions are subtracted from gross income.
C) In arriving at taxable income, a taxpayer must choose between the standard deduction and the deduction for qualified business income.
D) The tax formula does not apply if a taxpayer elects to claim the standard deduction.
E) None of these.

F) A) and E)
G) C) and E)

Correct Answer

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Matching Regarding classification as a dependent, classify each statement in one of the four categories: -A daughter-in-law who lives with taxpayer.


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.

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

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Katrina, age 16, is claimed as a dependent by her parents.During 2019, she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,950 ($5,600 earned income + $350).

A) True
B) False

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Claude's deductions from AGI exceed the standard deduction allowed for the current year.Under these circumstances, Claude cannot claim the standard deduction.

A) True
B) False

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Match the statements that relate to each other.Note: Some choices may be used more than once. -Age of a qualifying child


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.

M) G) and I)
N) E) and H)

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Matching Regarding classification as a dependent, classify each statement in one of the four categories: -A cousin who does not live with taxpayer.


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.

E) B) and C)
F) A) and B)

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A qualifying child cannot include:


A) A nonresident alien.
B) A married son who files a joint return.
C) A daughter who is away at college.
D) A brother who is 28 years of age and disabled.
E) A grandmother.

F) C) and D)
G) B) and C)

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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.

A) True
B) False

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Match the statements that relate to each other.Note: Choice k.may be used more than once. -Marginal income tax rate


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.

L) C) and G)
M) D) and F)

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In which of the following situations, if any, will the kiddie tax not apply?


A) The child is married but does not file a joint return.
B) The child has unearned income of $2,100 or less.
C) The child has unearned income that exceeds more than half of his (or her) support.
D) The child is under age 24 and a full-time student.
E) None of these.

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

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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.

A) True
B) False

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Adjusted gross income (AGI) appears on page 2 of Form 1040.

A) True
B) False

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

A) True
B) False

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Match the statements that relate to each other.Note: Choice k.may be used more than once. -Average income tax rate


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.

L) D) and G)
M) None of the above

Correct Answer

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Which of the following taxpayers may file as a head of household in 2019? Marco provides all of the support for his mother, Sienna, who lives by herself in an apartment in Fort Lauderdale.Marco pays the rent and other expenses for the apartment and properly claims his mother as a dependent. Tammy provides over one-half the support for her 18-year old brother, Dan.He earned $4,200 in 2019 working at a fast-food restaurant and is saving his money to attend college in 2020.Dan lives in Tammy's home. Juan's wife left him late in December of 2018.No legal action was taken and Juan has not heard from her in 2019.Juan supported his 6-year-old son, who lived with him throughout 2019.


A) Marco only
B) Tammy only
C) Juan only
D) Marco and Juan only
E) Marco, Tammy, and Juan

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

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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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Clara, age 68, claims head of household filing status.If she has itemized deductions of $18,900 for 2019, she should claim the standard deduction.

A) True
B) False

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Match the statements that relate to each other.Note: Choice k.may be used more than once. -Long-term capital gains


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.

L) A) and I)
M) A) and H)

Correct Answer

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Howard, age 82, died on January 2, 2019.On his final income tax return, the full amount of the basic and additional standard deductions will be allowed even though Howard lived for only two days during the year.

A) True
B) False

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Which of the following items, if any, is deductible?


A) Parking expenses incurred in connection with jury duty-taxpayer is a dentist.
B) Substantiated gambling losses (not in excess of gambling winnings) from state lottery.
C) Contributions to mayor's reelection campaign.
D) Speeding ticket incurred while on business.
E) Premiums paid on personal life insurance policy.

F) A) and B)
G) B) and C)

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