Question 1

In order to claim someone other than a qualifying child as a dependent, a taxpayer must meet the support test.
Generally, this is done by furnishing more than 50% of a dependent's support. What exceptions exist, if any, where the support furnished need not be more than 50%?

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Question 2

The major advantage of being classified as an abandoned spouse is that the taxpayer is treated for tax purposes as being single and not married. This means that an abandoned spouse can use the more favorable tax rates available to single persons than those available to married persons filing separately. Comment on the accuracy of this conclusion.

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Question 3

For the past few years, Corey's filing status has been as follows: 2015 (married/joint); 2016 (married/separate); 2017 (surviving spouse); 2018 (surviving spouse); and 2019 (head of household). Explain what probably has happened.

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Question 4

Regarding head of household filing status, comment on the following:
a. A taxpayer qualifies even though he maintains a household which he and the dependent do not share.
a. If the household is that of a dependent parent, it need not be taxpayer's household.
b. A taxpayer does not qualify even though the person sharing the household is a dependent.
c. The usual eventual filing status of a surviving spouse.

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Question 5

Adjusted gross income (AGI) sets the ceiling or the floor for certain deductions. Explain and illustrate what this statement means.

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Question 6

Mel is not quite sure whether an expenditure he made is a deduction for AGI or a deduction from AGI. Since he plans to choose the standard deduction option for the year, does the distinction matter? Explain.

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Question 7

In satisfying the support test and the gross income test for claiming someone as a dependent, a scholarship received by the person being claimed is handled the same way for each test. Do you agree or disagree with this statement? Why?

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The answer of In satisfying the support test and the...

Question 8

Contrast the tax consequences resulting from the following filing status situations:
a. Married filing jointly versus married filing separately.
a. Married persons filing jointly have a number of tax elections available to them that cannot be chosen if they file separate returns. For example, the credit for child and dependent care expenses and the earned income credit are not available unless married persons file joint returns.
b. Married filing separately versus single.
c. Married filing separately versus abandoned spouse status.

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Question 9

The Deweys are expecting to save on their taxes for 2019. Not only have both incurred large medical expenses, but both reached age 65. During the year, they also recognized a $30,000 loss on some land they sold which was purchased as an investment several years ago. Are the Deweys under a mistaken understanding regarding their tax position? Explain.

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Question 10

In applying the gross income test in the case of dependents that are married, could the application of community property laws have any effect? Explain.

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Question 11

Jayden and Chloe Harper are husband and wife and use the calendar year for tax purposes.
a. If the Harpers file a joint return for 2019, can they later switch to separate returns for 2019?
b. If the Harpers file separate returns for 2019, can they later switch to a joint return for 2019?

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The answer of Jayden and Chloe Harper are husband and...

Question 12

During the current year, Doris received a large gift from her parents and a sizeable inheritance from an uncle. She also paid premiums on an insurance policy on her life. Doris is confused because she cannot find any place on Form
1040 to report these items. Explain.

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Question 13

Lena is 66 years of age, single, and blind and is not claimed as a dependent. How much gross income must she have before she is required to file a Federal income tax return for 2019?

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Question 14

When married persons file a joint return, joint and several liability results. What does this mean?

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Question 15

Deductions for AGI are often referred to as "above-the-line" or "Schedule 1" deductions. Explain.

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Question 16

The Dargers have itemized deductions that exceed the standard deduction. However, when they file their joint return, they choose the standard deduction option.
a. Is this proper procedure?
b. Aside from a possible misunderstanding as to the tax law, what might be the reason for the
Darger's choice?

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The answer of The Dargers have itemized deductions that exceed...

Question 17

When filing their Federal income tax returns, the Youngs always claimed the standard deduction. After they purchased a home, however, they started to itemize their deductions from AGI.2019. Why the delay as to itemizing?
a. Explain the reason for the change.
b. Suppose they purchased the home in November 2018, but did not start itemizing until tax year

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Question 18

Under what circumstances, if any, may an ex-spouse be claimed as a dependent?

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Question 19

In meeting the criteria of a qualifying child for dependency purposes, when if ever, might the child's income become relevant?

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Question 20

In resolving qualified child status for dependency purposes, why are tiebreaker rules necessary? Can these rules be waived?

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Quiz 3: Computing the Tax

In order to claim someone other than a qualifying child as a dependent, a taxpayer must meet the support test. Generally, this is done by furnishing more than 50% of a dependent's support. What exceptions exist, if any, where the support furnished need not be more than 50%?