Chapter 3 Flashcards
Evan and Eileen Carter are husband and wife and file a joint return for 2014. Both are under 65 years of age. They provide more than half of the support of their daughter, Pamela (age 25), who is a full-time medical student. Pamela receives a $5,000 scholarship covering her tuition at college. They furnish all of the support of Belinda (Evan’s grandmother), who is age 80 and lives in a nursing home. They also support Peggy (age 66) who is a friend of the family and lives with them. How many dependency exemptions may the Carters claim?
A. Two B. Three C. Four D. Five E. None of these
B. Three
In which, if any, of the following situations may the individual not be claimed as a dependent of the taxpayer?
A. A former spouse who lives with the taxpayer (divorce took place last year).
B. A stepmother who does not live with the taxpayer.
C. A married daughter who lives with the taxpayer.
D. A half-brother who does not live with the taxpayer and is a citizen and resident of Canada.
E. A cousin who does not live with the taxpayer.
E. A cousin who does not live with the taxpayer.
Sylvia, age 17, is claimed by her parents as a dependent. During 2014, 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:
A. $4,200 - $4,550 = $0 B. $6,200 - $5,700 = $500 C. $6,200 - $4,550 = $1,650 D. $6,200 - $1,000 = $5,200 E. None of these
C. $6,200 - $4,550 = $1,650
Tony, age 15, is claimed as a dependent by his grandmother. During 2014, Tony had interest income from Boeing Corporation bonds of $1,000 and earnings from a part-time job of $700. Tony’s taxable income is:
A. $1,700 B. $1,700 - $700 - $1,000 = $0 C. $1,700 - $1,050 = $650 D. $1,700 - $1,000 = $700 E. None of these
C. $1,700 - $1,050 = $650
Merle is a widow, age 80 and blind, who is claimed as a dependent by her son. During 2014, she received $4,800 in Social Security benefits, $2,500 in bank interest, and $1,800 in cash dividends from stocks. Merle’s taxable income is:
A. $4,300 - $1,000 - $3,100 = $200 B. $4,300 - $3,100 = $1,200 C. $4,300 - $1,000 - $1,550 = $1,750 D. $9,100 - $1,000 - $3,100 = $5,000 E. None of these
A. $4,300 - $1,000 - $3,100 = $200
Wilma, age 70 and single, is claimed as a dependent on her daughter’s tax return. During 2014, she had interest income of $2,500 and $800 of earned income from babysitting. Wilma’s taxable income is:
A. $750 B. $900 C. $1,750 D. $2,200 E. None of these
E. None of these
Kyle, whose wife died in December 2011, filed a joint tax return for 2011. He did not remarry but has continued to maintain his home in which his two dependent children live. What is Kyle’s filing status as to 2014?
A. Head of household B. Surviving spouse C. Single D. Married filing separately E. None of these
A. Head of Household
Emily, whose husband died in December 2013, maintains a household in which her dependent mother lives. Which (if any) of the following is her filing status for the tax year of 2014? (Note: Emily is the executor of her husband’s estate.)
A. Single B. Married, filing separately C. Surviving spouse D. Head of Household E. Married, filing jointly
D. Head of Household
Which of the following taxpayers may file as a head of household in 2014?
Ron provides all the support for his mother, Betty, who lives by herself in an apartment in Fort Lauderdale. Ron 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. Dan earned $4,200 in 2014 working at a fast food restaurant and is saving money to attend college in 2015. Dan lives in Tammy’s home. Joe’s wife left him late in December of 2013. No legal action was taken and Joe has not heard from her in 2014. Joe supported his 6 year-old son, who lived with him throughout 2014.
A. Ron only B. Tammy only C. Joe only D. Ron and Joe only E. Ron, Tammy, and Joe
E. Ron, Tammy, and Joe
Nelda is married to Chad, who abandoned her in early June of 2014. 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 2014 is correct?
A. Nelda can use the rates for single taxpayers.
B. Nelda can file a joint return with Chad.
C. Nelda can file as a surviving spouse.
D. Nelda can file as a head of household.
E. None of these statements is appropriate.
D. Nelda can file as a head of household.
Arnold is married to Sybil, who abandoned him in 2013. 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 2014, Arnold’s filing status is:
A. Married, filing jointly B. Head of household C. Married, filing separately D. Surviving spouse E. Single
C. Married, filing separately
In which, if any, of the following situations 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 $2,000 or less.
C. The child has unearned income hat exceeds more than half his (or her) support.
D. The child is under age 24 and a full-time student.
E. None of these
B. The child has an unearned income of $2,000 or less.
Which, if any, of the following is a correct statement relating to the kiddie tax?
A. If the parents are divorced, the income of the noncustodial parent is used to determine the allocable parental tax.
B. The components for the application of the kiddie tax are not subject to adjustment for inflation.
C. If the kiddie tax applies, the parents must include the income of the child on their own income tax return.
D. The kiddie tax does not apply if both parents of the child are deceased.
E. None of these
D. The kiddie tax does not apply if both parents of the child are deceased.
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.
E. A grandmother.
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 the 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
D. All parties involved (i.e. father, grandfather, and uncle)
