Question 1

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

Accepted Answer

An individual who does not meet the criteria to be considered a qualifying child may still be claimed as a dependent if they meet the other requirements, such as providing more than half of their support and not exceeding certain income limits.

Question 2

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 not based on an individual's vision, only on their filing status and age.

Question 3

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 can not only reduce a taxpayer's tax liability but also result in a refund if the credits exceed the tax liability. Therefore, any excess credits are not lost but rather refunded to the taxpayer.

Question 4

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

If an individual is claimed as a dependent by another person, they cannot claim a personal exemption on their own tax return. The person claiming them as a dependent may be entitled to a dependent exemption.

Question 5

Gross income is income from whatever source derived less exclusions.

Accepted Answer

Gross income is defined as all income from any source, including but not limited to wages, tips, interest, dividends, rental income, and business income, minus any exclusions or deductions allowed by law.

Question 6

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 according to the IRS rules regarding dependency exemptions. However, divorced parents can come to their own agreement and have the non-custodial parent claim the exemption if they both sign IRS Form 8332.

Question 7

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 can only be used to reduce or eliminate a taxpayer's tax liability. If the credits exceed the tax liability, the excess amount cannot be refunded or carried forward to future tax years. The taxpayer will simply lose that portion of the credit.

Question 8

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

This is stated in the IRS rules for determining who can claim a dependent.

Question 9

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

Accepted Answer

A qualifying child of the taxpayer is not required to meet the gross income test. This test is only applicable to dependents who are not qualifying children.

Question 10

Nonresident aliens are allowed a full standard deduction.

Accepted Answer

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

Question 11

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 is a true statement. To claim a dependent other than a qualifying child, the taxpayer must provide more than 50% of the dependent's support.

Question 12

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 13

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

Accepted Answer

Itemized deductions are expenses that can be claimed on a personal tax return that the tax law specifically allows. Examples include charitable contributions, mortgage interest, and state and local taxes.

Question 14

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 must provide at least 50% of the dependent's support in order to claim a dependency exemption under a multiple support declaration.

Question 15

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 statement is true. While some exclusions may not need to be reported on an individual's income tax return, interest income on state and local government bonds is an exception and must be reported on the tax return.

Question 16

A child credit is a partially refundable credit.

Accepted Answer

A child credit is a partially refundable credit, meaning that if the credit exceeds the taxpayer's liability, they may be eligible to receive a portion of the credit as a refund.

Question 17

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

Accepted Answer

According to the IRS, "if you file a separate return, you generally report only your own income, exemptions, deductions, and credits. You can’t take the standard deduction if your spouse itemizes deductions."

Question 18

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 19

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

Question 20

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 is true according to the IRS rules for claiming a dependent. The qualifying child must not provide more than half of their own support during the year in order for the person claiming them as a dependent to be eligible for the dependency exemption.

Quiz 4: Determination of Tax