Question 1

Edward, a widower whose wife died in 2012, maintains a household for himself and his daughter who qualifies as his dependent. Edward's most favorable filing status for 2015 is

Accepted Answer

Surviving spouse status is only available for the two years following the spouse's death, in this case, 2013 and 2014. However, Edward does qualify for head of household in 2015.

Question 2

Which of the following dependent relatives does not have to live in the same household as the taxpayer who is claiming head of household filing status?

Accepted Answer

A taxpayer with a dependent parent qualifies as head of household even if the parent does not live with the taxpayer.

Question 3

A married taxpayer may file as head of household under the abandoned spouse provisions if all of the following are met except

Accepted Answer

The first three items are all required to meet the abandoned spouse definition. The requirements do not specify a minimum length of marriage.

Question 4

The oldest age at which the "Kiddie Tax" could apply to a dependent child is

Accepted Answer

The child must be under age 24.

Question 5

Frank, age 17, received $4,000 of dividends and $1,500 from a part-time job. Frank is a dependent of his parents who are in the 28% percent bracket. Frank's 2015 taxable income is

Accepted Answer

($4,000 + $1,500) - $1,850 std. ded. = $3,650. The standard deduction is the greater of $1,050 or earned income of $1,500 plus $350 ($1,850).

Question 6

Vincent, age 12, is a dependent of his parents. During 2015, Vincent's earned income from wages is $2,600 and Vincent received $3,000 of interest income. The parent's marginal rate is 28% and Vincent's marginal rate is 10%. Vincent's tax is

Accepted Answer

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Question 7

Sally divorced her husband three years ago and has not remarried. Since the divorce she has maintained her home in which she and her now sixteen-year-old daughter reside. The daughter is a qualified child. Sally signed the dependency exemption over to her ex-spouse by filing the appropriate IRS form. What is Sally's filing status for the current year and how many exemptions may she claim?

Accepted Answer

Sally qualifies as head of household for the current year. A taxpayer with a qualifying child satisfies the head of household requirement even if the taxpayer releases the dependency exemption to the child's other parent.

Question 8

Michelle, age 20, is a full-time college student with earned income from wages of $5,200 and interest income of $700. Michelle's parents provide more than half of Michelle's support. Michelle's 2015 taxable income is

Accepted Answer

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Question 9

Carter dies on January 1, 2014. A joint return election is made in 2014 and Marjorie properly qualifies as a surviving spouse for the two following years. Marjorie has one child that she claims as a dependent for this same period. The number of personal and dependency exemptions allowed Marjorie in 2014 and in 2015 is, respectively

Accepted Answer

Three exemptions for 2014 (joint return) and two for 2015 (surviving spouse).

Question 10

The filing status in which the rates increase most rapidly is

Accepted Answer

The rates on the married filing a separate return schedule increases more rapidly than other individual rate schedules.

Question 11

In 2012, Leo's wife died. Leo has two small children, ages 2 and 4, living at home whom he supports entirely. Leo does not remarry and is not claimed as a dependent on another's return during any of this period. In 2013, 2014, and 2015, Leo's most advantageous filing status is, respectively

Accepted Answer

In the two years following year of death (2013 and 2014), Leo may file as surviving spouse as long as he has at least one dependent child living in the home during the entire year and he provides over half of the expenses of the home. After the two years following the year of death, Leo qualifies as head of household as he is unmarried and is maintaining a home for a qualifying individual (in this case, his qualifying child).

Question 12

In October 2014, Joy and Paul separated and have not lived with each other since, but they are still legally married. They do not file a joint return. Joy supports their children after the separation and pays the cost of maintaining their home. Joy's filing status in 2014 and 2015 is, respectively,

Accepted Answer

Joy and Paul are married on the last day of the year so either a joint return or a separate return is required unless Joy qualifies as an abandoned spouse (and thus, head of household). She does not qualify in 2014 since Paul was in the home during the last six months of the year. However, since Paul is gone, a married filing separate return is necessary since he is not around to sign a joint return. In 2015, Joy, though still married, qualifies as an abandoned spouse and, thus, head of household.

Question 13

Elise, age 20, is a full-time college student with earned income from wages of $4,400 and interest income of $500. Elise's parents provide more than half of her support. Elise's 2015 taxable income is

Accepted Answer

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Question 14

Keith, age 17, is a dependent of his parents. During 2015, he received $3,000 of dividend income. The parent's marginal rate is 28% and Keith's rate is 10%. Keith's tax is

Accepted Answer

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Question 15

Dave, age 59 and divorced, is the sole support of his mother age 83, who is a resident of a local nursing home for the entire year. Dave's mother had no income for the year. Dave's filing status and exemptions claimed are

Accepted Answer

Dave's mother qualifies as his dependent; therefore, he gets two exemptions. He qualifies as head of household since a taxpayer with a dependent parent qualifies even if the parent does not live with the taxpayer.

Question 16

In order to qualify to file as surviving spouse, all of the following criteria must be met by the widow or widower except

Accepted Answer

There is no requirement that the surviving spouse and the deceased spouse were living in the same household as of date of death.

Question 17

To qualify as an abandoned spouse, the taxpayer is not required to

Accepted Answer

The dependent son or daughter need only live in the taxpayer's home for more than one half year.

Question 18

The following information for 2015 relates to Emma Grace, a single taxpayer, age 18:  a. Compute Emma Grace's taxable income assuming she is self-supporting.
b. Compute Emma Grace's taxable income assuming she is a dependent of her parents.

Accepted Answer

The answer of The following information for 2015 relates to...

Question 19

Satish, age 11, is a dependent of his parents. His only source of income in 2015 is $3,000 of interest income on bonds given him by his grandparents. Satish's marginal rate is 10%, and his parent's marginal rate is 28%. Satish's tax is

Accepted Answer

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Question 20

Liz and Bert divorce and Liz receives custody of their child. Bert is ordered by the court to pay child support of $10,000 per year, and Liz files the appropriate IRS form to allow Bert to claim the dependency exemption for the child. If Liz maintains the home in which she and her child live, her filing status and exemptions claimed will be

Accepted Answer

Liz gets a personal exemption for herself. A taxpayer with a qualifying child satisfies the head of household requirement even if the taxpayer releases the dependency exemption to the child's other parent.

Quiz 2: Determination of Tax