Question 1

Generally,in the case of a divorced couple,the parent who has physical custody of a child for the greater part of the year is entitled to the dependency exemption.

Accepted Answer

This is generally true as the Internal Revenue Service (IRS) allows the parent who has physical custody of the child for more than half of the year to claim the dependency exemption. However, divorced parents can negotiate and come to an agreement to alternate claiming the exemption or allocate it differently.

Question 2

The standard deduction may not be claimed by one married taxpayer filing a separate return if the other spouse itemizes deductions.

Accepted Answer

This is true according to IRS rules. If one spouse chooses to itemize deductions, then the other spouse must also itemize their deductions in order to claim any tax deductions. This means that neither spouse can claim the standard deduction.

Question 3

A child credit is a partially refundable credit.

Accepted Answer

The child tax credit is partially refundable, meaning that even if the taxpayer does not owe any taxes, they may still receive a refund for a portion of the credit.

Question 4

A qualifying child of the taxpayer must meet the gross income test.

Accepted Answer

A qualifying child cannot have a gross income greater than a certain amount (currently $4,300 for 2020), but the taxpayer does not have to meet the gross income test.

Question 5

An individual may not qualify for the dependency exemption as a qualifying child but may still qualify as a dependent.

Accepted Answer

An individual may still qualify as a dependent even if they do not meet the criteria to be a qualifying child. They may qualify as a qualifying relative if they meet the other requirements for dependency.

Question 6

When two or more people qualify to claim the same person as a dependent,a taxpayer who is entitled to the exemption through the qualified child rules has priority over a taxpayer who meets the requirements for other relatives.

Accepted Answer

According to the IRS rules, when two or more people qualify to claim the same person as a dependent, a taxpayer who is entitled to the exemption through the qualified child rules has priority over a taxpayer who meets the requirements for other relatives.

Question 7

Gross income is income from whatever source derived less exclusions.

Accepted Answer

This is the standard definition of gross income as per IRS guidelines.

Question 8

Although exclusions are usually not reported on an individual's income tax return,interest income on state and local government bonds must be reported on the tax return.

Accepted Answer

This is true. Although income from certain types of bonds may be excluded from gross income for federal income tax purposes, interest income on state and local government bonds still must be reported on the tax return.

Question 9

Generally,deductions for (not from)adjusted gross income are personal expenses specifically allowed by tax law.

Accepted Answer

The answer of Generally,deductions for (not from)adjusted gross income are...

Question 10

Refundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.

Accepted Answer

Refundable tax credits are different from non-refundable tax credits because they can result in a refund to the taxpayer, even if their tax liability has been completely eliminated. This means that any excess credit beyond the tax liability is not lost, but instead is refunded to the taxpayer.

Question 11

Nonrefundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.

Accepted Answer

Nonrefundable tax credits cannot result in a refund, but they can reduce a taxpayer's tax liability to zero. However, any excess credit cannot be refunded or carried over to future years.

Question 12

The standard deduction is the maximum amount of itemized deductions which may be claimed by a taxpayer,and is based on an individual's filing status,age,and vision.

Accepted Answer

The standard deduction is a fixed amount set by the government each year and is not based on age or vision. It is determined by the taxpayer's filing status and can be claimed instead of itemizing deductions.

Question 13

Nonresident aliens are allowed a full standard deduction.

Accepted Answer

The answer of Nonresident aliens are allowed a full standard...

Question 14

Generally,itemized deductions are personal expenses specifically allowed by the tax law.

Accepted Answer

Itemized deductions are deductions for personal expenses that are specifically allowed by the tax law, such as certain medical expenses, state and local taxes, mortgage interest, and charitable contributions. They are subtracted from a taxpayer's adjusted gross income to reduce their taxable income.

Question 15

Taxpayers have the choice of claiming either the personal and dependency exemption or the standard deduction.

Accepted Answer

Taxpayers claim the greater of itemized deductions or the standard deduction.In addition,taxpayers will reduce taxable income by personal and dependency exemptions.

Question 16

For purposes of the dependency exemption,a qualifying child must be under age 19,a full-time student under age 24,or a permanently and totally disabled child.

Accepted Answer

This statement is true. According to the IRS, a qualifying child must meet one of these criteria to be eligible for the dependency exemption.

Question 17

An individual who is claimed as a dependent by another person is not entitled to a personal exemption on his or her own return.

Accepted Answer

When someone is claimed as a dependent by another person, they cannot claim a personal exemption on their own tax return. The exemption goes to the person claiming them as a dependent.

Question 18

One requirement for claiming a dependent other than a qualifying child is that the taxpayer provides more than 50 percent of the dependent's support (assuming it is not a multiple support agreement situation).

Accepted Answer

This requirement is true. To claim a dependent other than a qualifying child, the taxpayer must provide more than 50 percent of the dependent's support, as long as it is not a multiple support agreement situation.

Question 19

For purposes of the dependency exemption,a qualifying child may not provide more than one-half of his or her own support during the year.

Accepted Answer

This statement is true. To qualify as a dependent, a child must not have provided more than half of their own support during the year.

Question 20

The person claiming a dependency exemption under a multiple support declaration must provide more than 25% of the dependent's support.

Accepted Answer

The person claiming a dependency exemption under a multiple support declaration must provide at least 10% of the dependent's support, not necessarily more than 25%.

Quiz 4: I: Determination of Tax