Question 1

Monique is a citizen of the U.S.and a resident of France.If she files a U.S.income tax return,Monique can claim the standard deduction.

Accepted Answer

As a U.S. citizen, Monique is eligible to claim the standard deduction on her U.S. income tax return, regardless of her residency status in France. However, she may also be subject to taxes in France on her worldwide income, and may need to file tax returns in both countries.

Question 2

A dependent cannot claim a personal exemption on his or her own return.

Accepted Answer

A dependent cannot claim a personal exemption on their own return because they are being claimed as an exemption on someone else's tax return. The person claiming them as a dependent is eligible for the exemption.

Question 3

Buddy and Hazel are ages 72 and 71 and file a joint return.If they have itemized deductions of $13,500 for 2011,they should not claim the standard deduction.

Accepted Answer

The standard deduction for married filing jointly in 2011 was $11,600, so even with itemized deductions of $13,500, they could still claim the standard deduction if it resulted in a greater tax benefit.

Question 4

Derek,age 46,is a surviving spouse.If he has itemized deductions of $11,700 for 2011,Derek should not claim the standard deduction.

Accepted Answer

According to the IRS, a surviving spouse cannot claim the standard deduction if their itemized deductions exceed it. For the 2011 tax year, the standard deduction for a surviving spouse was $11,600, so if Derek has itemized deductions of $11,700, he should not claim the standard deduction.

Question 5

After her divorce,Hope continues to support her ex-husband's sister,Cindy,who does not live with her.Hope can claim Cindy as a dependent.

Accepted Answer

The answer of After her divorce,Hope continues to support her...

Question 6

In 2011,Hal furnishes more than half of the support of his ex-wife and her father,neither of whom lives with him.The divorce occurred in 2010.Hal may claim the father-in-law and the ex-wife as dependents.

Accepted Answer

In 2011, Hal cannot claim his ex-wife as a dependent because they are divorced. He may claim his ex-father-in-law as a dependent if he meets the IRS requirements for a qualifying relative, such as providing more than half of his support and meeting other criteria.

Question 7

Using borrowed funds from a mortgage on her home,Leah provides 52% of her own support,while her sons furnished the rest.Leah cannot be claimed as a dependent under a multiple support agreement.

Accepted Answer

Leah provided more than half (50%) of her own support and therefore does not qualify to be claimed as a dependent under a multiple support agreement. The fact that she used borrowed funds from a mortgage on her home does not change this.

Question 8

Benjamin,age 16,is claimed as a dependent by his parents.During 2011,he earned $700 at a car wash.Benjamin's standard deduction is $1,250 ($950 + $300).

Accepted Answer

The standard deduction for a dependent with earned income is either $1,050 or the amount of earned income plus $350, whichever is greater. Therefore, Benjamin's standard deduction would be $1,050, not $1,250.

Question 9

Albert buys his mother a TV.For purposes of meeting the support test,Albert can include the cost of the TV.

Accepted Answer

According to the support test, Albert can include the cost of the TV in determining if he provided more than half of his mother's support. Therefore, the statement is true.

Question 10

Dan and Donna are husband and wife and file separate returns for the year.If Dan itemizes his deductions from AGI,Donna cannot claim the standard deduction.

Accepted Answer

If one spouse itemizes deductions, the other spouse must also itemize deductions or forfeit their standard deduction.

Question 11

Butch and Minerva are divorced in December of 2011.Since they were married for more than one-half of the year,they are considered asmarried for 2011.

Accepted Answer

The answer of Butch and Minerva are divorced in December...

Question 12

Roy and Linda were divorced in 2010.The divorce decree awards custody of their children to Linda but is silent as to who is entitled to claim them as dependents.If Roy furnished more than half of their support,he can claim them as dependents in 2011.

Accepted Answer

If the divorce decree is silent on who is entitled to claim the children as dependents, the default rule is that the custodial parent is entitled to claim them. Therefore, Linda would be entitled to claim the children as dependents in this scenario, regardless of who provided more than half of their support.

Question 13

Clara,age 68,claims head of household filing status.If she has itemized deductions of $9,500 for 2011,she should not claim the standard deduction.

Accepted Answer

For the 2011 tax year, the standard deduction for a head of household was $8,500. Since Clara's itemized deductions of $9,500 exceed the standard deduction, she should itemize her deductions.

Question 14

Even if the individual does not spend funds that have been received from another source (e.g.,interest on municipal bonds),the unexpended amounts are considered for purposes of the support test.

Accepted Answer

The answer of Even if the individual does not spend...

Question 15

For the year a spouse dies,the surviving spouse is considered married for the entire year for income tax purposes.

Accepted Answer

According to IRS regulations, the surviving spouse is considered married for the entire year in which their spouse passed away. This means they can still file a joint tax return for that year and claim certain deductions and credits as a married couple.

Question 16

Debby,age 18,is claimed as a dependent by her mother.During 2011,she earned $1,100 in interest income on a savings account.Debby's standard deduction is $1,400 ($1,100 + $300).

Accepted Answer

The statement is incorrect. Debby's standard deduction cannot be $1,400 as it cannot exceed her earned income of $1,100. Additionally, being claimed as a dependent by her mother means that Debby's standard deduction would be limited to either her earned income or $1,050, whichever is less. Therefore, her standard deduction would be $1,050.

Question 17

When separate income tax returns are filed by married taxpayers,one spouse cannot claim the other spouse as an exemption.

Accepted Answer

The answer of When separate income tax returns are filed...

Question 18

In determining whether the support test is met for dependency exemption purposes,only the taxable portion of a scholarship is considered.

Accepted Answer

The answer of In determining whether the support test is...

Question 19

Katrina,age 16,is claimed as a dependent by her parents.During 2011,she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,900 ($5,600 earned income + $300).

Accepted Answer

As per the IRS rules for the year 2011, the standard deduction for a dependent with earned income was limited to the greater of $950 or earned income + $300, not to exceed the regular standard deduction amount of $5,800. Therefore, Katrina's standard deduction would be limited to $5,500 ($5,600 + $300 - $950) rather than $5,900.

Question 20

Logan,an 80-year-old widower,dies on January 2,2011.Even though he lived for only two days,on his final income tax return for 2011,the full basic and additional standard deductions can be claimed.

Accepted Answer

The basic and additional standard deductions can be claimed on the final income tax return of a deceased individual for the entire year of their death, regardless of how long they lived during that year. Therefore, Logan's final income tax return for 2011 can claim the full deductions even though he only lived for two days.

Quiz 3: Tax Determination: Personal and Dependency Exemptions: an Overview of Property Transactions