Chapter 4: Individual Income Tax Overview

Question 1

To qualify as a dependent of another, an individual:

Answer 1

1. Must be a citizen of the US or a resident of the US, Canada, or Mexico
2. Must NOT file a joint return with spouse unless there is no tax liability on joint’s return AND there would now have been any tax liabilty on either’s return if they had filed separately
3. Must be considered either a qualifying child or relative of the taxpayer

Question 2

What are the tests for a qualifying child?

Answer 2

Relationship test (child/descendant, sibling/descendant)
Age test (Under 19 or under 24 and FTS)
( > 1/2 year)
support test (50% - negative)

Question 3

What are the tests for a qualifying relative?

Answer 3

1. Not a qualifying child
2. Relationship test (father, mother, ancestor, or their siblings, in-laws) OR
   Abode - full year
3. Gross Income < exemption (3900)
4. Support ( 50% - positive)

Question 4

An “abandoned spouse” will use which filing status?

Answer 4

Head of Household

Question 5

Explain the Surviving Spouse filing status

Answer 5

Spouse dies and you have kids at home. You can use surviving spouse for two years AFTER the year that the spouse died. The year OF death will qualify as married filing separately. If dependents move out, qualifies as single.

Question 6

What is the maximum amount of a Capital loss above Capital gain that can be deducted?

Answer 6

$3000

Question 7

What are the qualifications for Head of Household filing status?

Answer 7

Be unmarried at the end of the year
Not a qualifying widow(er)
Pay more than half the costs of keeping up a home for the year
Have a qualifying person home for MORE THAN HALF THE YEAR. (Parents don’t need to be home).