Filing requirments exam 1 Flashcards
A nonresident alien received a $50,000 scholarship from a U.S. corporation to go to a gymnastic camp in the individual’s resident country, which has a 20% flat tax. How much U.S. tax must be paid on the scholarship?
Jh. $15,000 B. $7,650
C.
$0
D.
$10,000
$0
Answer C is correct.
A scholarship, fellowship, grant, etc. received by a nonresident alien for activities conducted outside of the U.S. is treated as foreign source income (Publication 515). Because the scholarship will not be treated as U.S. source income, there is no U.S. tax.
Midshipman Mike, a calendar-year taxpayer, was assigned a post of duty on the U.S.S. Enterprise. The ship went on a 6-month cruise of the Mediterranean Sea, leaving February 15, Year 2. Mike did not file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. Mike is automatically granted an extension of time to file his Year 1 income tax return and pay any tax due until A. October 15, Year 2. B. June 15, Year 2. C. August 15, Year 2. D. No automatic extension is granted. Mike must file and pay tax due by April 15, Year 2.
I
B.
June 15, Year 2.
Answer (B) is correct.
A U.S. citizen or resident who, on April 15, is in military or naval service on duty outside the U.S. and Puerto Rico is given an automatic 2-month extension without the necessity of filing Form 4868 (Publication 17).
All of the following are included in calculating the total support of a dependent except
A.
Child care even if the taxpayer is claiming the credit for the expense.
B.
Amounts veterans receive under the GI bill for tuition and allowances while in school.
C.
Medical insurance benefits, including basic and supplementary Medicare benefits received.
.
C.
Medical insurance benefits, including basic and supplementary Medicare benefits received.
taxpayer must provide over one-half of the support for a person to be considered a dependent [Sec. 152(a)]. The term support includes food, shelter, clothing, medical and dental care, education, and other items contributing to the individual’s maintenance and livelihood [Reg. 1.152-1(a)(2)]. Although medical care is an item of support, medical insurance benefits are not included. Medical insurance premiums are included (Publication 501).
With regard to claiming a dependent, all of the following statements are true except
A.
A person does not meet the member-of-the-household test if at any time during the tax year the relationship between the taxpayer and that person violates local law.
B.
A person who died during the year, but was a member of your household until death, will meet the member-of-the-household test.
C.
To meet the citizenship test, a person must be a U.S. citizen or resident, or a resident of Canada or Mexico.
D.
In calculating a person’s total support, do not include tax-exempt income used to support that person.
D.-this is wrong and execep
In calculating a person’s total support, do not include tax-exempt income used to support that person.
John and Linda Smith are a childless married couple who lived apart for all of the current year. On December 31 of the current year, they were legally separated under a decree of separate maintenance. Based on the facts, which of the following is the only filing-status choice available to them for the current year?
A. Married filing joint return.
B. Married filing separate return.
C. Single.
D. Head of household.
C. Single.
Answer (C) is correct.
The determination of whether an individual is married is made as of the close of the taxable year, so John and Linda are both single for the current year (Publication 17).
Which of the following taxpayers must file a return for 2016?
A. A single taxpayer, age 67, with interest and dividend income of $10,000.
B. A taxpayer who files as a head of household with two exemptions and who earns $15,000
C. A single taxpayer, claimed as a dependent by his parents, who earns $6,000 from a part-time job and has no unearned income.
D. Married taxpayers filing jointly who have income of $19,000 for the year and one child who is a dependent.
B. A taxpayer who files as a head of household with two exemptions and who earns $15,000.
Answer (B) is correct.
Generally, a taxpayer must file a tax return if the taxpayer’s gross income equals or exceeds the sum of his or her personal exemption and standard deduction [Publication 501 and Sec. 6012(a)]. Section 151 allows a $4,050 personal exemption for each taxpayer in 2016. Standard deductions in 2016 are $12,600 for married filing jointly, $9,300 for heads of household, and $6,300 for single individuals. A taxpayer who files as a head of household must file a return if his or her gross income equals or exceeds $13,350 ($9,300 + $4,050).
husband and wife can file a joint return even if
A. The spouses have different tax years, provided that both spouses are alive at the end of the year.
B. They were divorced before the end of the tax year.
C. Either spouse was a nonresident alien at any time during the tax year, provided that at least one spouse makes the proper election.
D. The spouses have different accounting methods.
D. The spouses have different accounting methods.
Answer D is correct.
There is no provision disallowing spouses to file a joint return because they have different accounting methods (Publication 17).
T or F why
If a taxpayer is an alien (not a U.S. citizen), (s)he is considered a nonresident alien unless the taxpayer meets both the green card test and the substantial presence test for the calendar year.
F
Your answer is correct.
If a taxpayer is an alien (not a U.S. citizen), (s)he is considered a nonresident alien unless (s)he meets the green card test or the substantial presence test for the calendar year.
T or F
taxpayer is considered unmarried for head of household purposes if the taxpayer’s spouse was a nonresident alien at any time during the year and the taxpayer does not choose to treat his or her nonresident spouse as a resident alien.
True.
Your answer is correct.
A taxpayer is considered unmarried for head of household purposes if the taxpayer’s spouse was a nonresident alien at any time during the year and the taxpayer does not choose to treat his or her nonresident spouse as a resident alien.
T or F
Nonresident aliens cannot deduct itemized deductions.
False.
Your answer is correct.
Nonresident aliens can deduct certain itemized deductions if income is received that is effectively connected with U.S. trade or business. These deductions include state and local income taxes, charitable contributions to U.S. organizations, casualty and theft losses, and miscellaneous deductions.
Malcolm and Glenda were married, but they got divorced on June 1 of the current year. Their one minor child lived with Glenda all of the year. Glenda worked all year and provided more than half the cost of keeping up the home for herself and her minor child. Glenda signed Form 8332, Release of Claim to Exemption for Child of Divorced or Separated Parents, allowing Malcolm to claim the exemption for their child on his separately filed return. Glenda’s proper filing status is
A.
Married filing jointly.
B.
Single.
C.
Married filing separately.
D.
Head of household.
Head of household.
Answer D is correct.
The determination of whether an individual is married is made as of the close of the taxable year, so Glenda is unmarried. Glenda is not a surviving spouse, and the tax rates for a head of household are lower than those for a single taxpayer. To qualify for head of household rates, she must maintain (furnish over half the cost of) a household as her home that is also the domicile of her unmarried child, and she must be entitled to the dependency exemption for the child [Sec. 2(b)]. Glenda is allowed to grant the exemption to the other parent [Publication 17 Chapter 2 Head of Household (considered unmarried items)]. Glenda meets these requirements for head of household status.
Ms. Alexander properly executed a request for an automatic extension of time to file her 2016 tax return. She must file her 2016 return on or before (ignoring Saturdays, Sundays, and holidays)
A.
August 15, 2017.
B.
April 15, 2017.
C.
July 15, 2017.
D.
October 15, 2017.
October 15, 2017.
Answer D is correct.
An individual may obtain an automatic extension of 6 months for filing Form 1040, 1040A, or Form 1040EZ if the individual files, on or before the due date of the return, an application (Form 4868) accompanied by a proper estimate of tax due for the year (Publication 17).
For 2016, Mr. and Mrs. Taxpayer filed a joint return. During 2016, they provided more than 50% of the support for the following individuals, all of whom are U.S. citizens:
The Taxpayers’ single daughter, age 22, was a full-time student for 8 months. During the summer, she earned $4,200, which was spent on her support.
Mr. Taxpayer’s cousin, age 16, lived with them from May to December.
Mr. Taxpayer’s widowed mother, age 72, lived with them and had no income.
The Taxpayers’ single daughter, age 19, lived with them the full year. She had gross income of $3,500.
Mrs. Taxpayer’s widowed father, age 64, lived alone, and his sole source of income was Social Security of $5,500.
The Taxpayers’ legally adopted son, age 10, lived with them from February to December.
How many exemptions may Mr. and Mrs. Taxpayer claim on their 2016 tax return?
A. 6
B. 7
C. 5
D. 8
7
Answer B is correct.
To qualify for the dependency exemption, the taxpayer must provide over 50% of the support of a U.S. citizen who meets certain relationship tests stated in Sec. 152(a). Each of the individuals listed qualifies under the relationship test of Sec. 152, except for Mr. Taxpayer’s cousin because (s)he was not a member of the household for the entire year. Sec. 151(c) imposes additional limitations on the dependency exemption. These include a limit on gross income for each dependent of less than the exemption amount, unless (s)he is a child of the taxpayer and is under 19 years of age or a full-time student under 24 years of age. The dependency exemption is not allowed if a dependent has filed a joint return with his or her spouse for the taxable year unless the joint return is filed solely to receive a refund.
Mr. and Mrs. Taxpayer are entitled to one exemption each for themselves. They are also entitled to one exemption each for their single daughter who is a full-time student, their legally adopted son, their single daughter who lived with them, Mr. Taxpayer’s widowed mother, and Mrs. Taxpayer’s widowed father, for a total of seven. Each qualifies as a dependent by passing all the dependency tests. Social Security is not included in gross income at his level of income, so Mrs. Taxpayer’s father does not fail the gross income test. The Taxpayers are entitled to a dependency exemption for their 19-year-old daughter because she earned less income during the year than the exemption amount ($4,050 in 2016). Since she is 19 (i.e., over 18) and not a student, she does not qualify as a child but does as a relative. The Taxpayers are not entitled to an exemption for Mr. Taxpayer’s cousin, who fails to qualify as a member of the extended family (and is not a dependent). (Publication 501.)
Marcy, age 12, earned $400 from babysitting during 2016. Her parents claim her as a dependent. She also had interest and dividends of $2,600 during the year. She did not itemize deductions. What is her net unearned income for 2016?
A.
$500
B.
$2,600
C.
$1,550
D.
$3,000
A.
$500
Answer A is correct.
Net unearned income is defined in Sec. 1(g)(4) as unearned income less the sum of (1) $1,050, plus (2) the greater of $1,050 or, if the child itemizes, the amount of allowable deductions directly connected with the production of the unearned income. However, unearned income may not exceed the child’s taxable income (Publication 929). Marcy’s unearned income consists of $2,600 of interest and dividends. Her net unearned income is $500 [$2,600 – ($1,050 + $1,050)].
Mr N who is married wants to file single person for the current year, Which of the following will prevent her from filing single person?
A home was for more than 6 months of the yr, THe principal home,who she can claim as dependent
B She paid more than half the cost of keeping up her home fo the year
C She and her husband did not comingle funds for support porpuses
D HEr spouse lived in her home for the final 6 months of the current year
D the fact her spouse lived one final 6 months of tax year will prevent her filing single person
Mr. W died early in the current year. Mrs. W remarried in December of the same year and therefore was unable to file a joint return with Mr. W. What is the filing status of the decedent, Mr. W?
A.
Single.
B.
Married filing separate return.
C.
Married filing joint return.
D.
Head of household.
B.
Married filing separate return.
Answer B is correct.
Generally, a surviving spouse may file a joint return for himself or herself and the decedent. In that case, the decedent’s filing status on the final return would be married filing jointly. However, a joint return with the deceased spouse may not be filed if the surviving spouse remarried before the end of the year of the decedent’s death. In this case, the filing status of the deceased spouse is that of married filing separate return [Publication 17 and Sec. 6013(a)(2)].
Ensign Beleau, a calendar-year taxpayer, was assigned a post of duty on the U.S.S. Eisenhower. The ship went on a 6-month cruise of the Mediterranean Sea, leaving February 15, 2017. Ensign Beleau did not file Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return. Beleau is automatically granted an extension of time to file his 2016 income tax return and pay any tax due until (ignoring Saturdays, Sundays, and holidays)
A.
October 15, 2017.
B.
August 15, 2017.
C.
No automatic extension is granted. Beleau must file and pay tax due by April 15, 2017.
D.
June 15, 2017.
D.
June 15, 2017.
Answer D is correct.
A U.S. citizen or resident who, on April 15, is in military or naval service on duty outside the U.S. and Puerto Rico is given an automatic 2-month extension without the necessity of filing Form 4868 (Publication 17).
James and Edna Evans are a childless married couple who lived apart for all of the year. On December 31, they were legally separated under a decree of separate maintenance. Which of the following is the only filing-status choice available to them for the year?
A.
Single.
B.
Married filing joint return.
C.
Married filing separate return.
D.
Head of household.
A.
Single.
Answer A is correct.
The determination of whether an individual is married is made as of the close of the taxable year, so James and Edna are both single for the current year (Publication 17).
