Question 1

Benjamin, age 16, is claimed as a dependent by his parents. During 2018, he earned $850 at a car wash. Benjamin's standard deduction is $1,400 $1,050 + $350).

Accepted Answer

The answer of Benjamin, age 16, is claimed as a...

Question 2

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 is required to do the same (if they choose to itemize) and cannot claim the standard deduction.

Question 3

Derek, age 46, is a surviving spouse. If he has itemized deductions of $26,250 for 2018, Derek should not claim the standard deduction.

Accepted Answer

For tax year 2018, the standard deduction for a surviving spouse is $24,000. Since Derek's itemized deductions of $26,250 are greater than the standard deduction, he should itemize his deductions instead of claiming the standard deduction.

Question 4

Butch and Minerva are divorced in December of 2018. Since they were married for more than one-half of the year, they are considered as married for 2018.

Accepted Answer

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

Question 5

Jason and Peg are married and file a joint return. Both are over 65 years of age and Jason is blind. Their standard deduction for 2018 is $27,900 $24,000 + $1,300 + $1,300 + $1,300).

Accepted Answer

The standard deduction for a married couple filing jointly and both over 65 years of age is $26,600 ($24,000 + $1,300 + $1,300). Since Jason is also blind, they qualify for an additional $1,300, bringing their total standard deduction to $27,900.

Question 6

Clara, age 68, claims head of household filing status. If she has itemized deductions of $18,900 for 2018, she should
claim the standard deduction.

Accepted Answer

The standard deduction for a head of household filer who is 65 or older is $18,000 for tax year 2018. Clara's itemized deductions of $18,900 do not exceed the standard deduction, so she should claim the standard deduction to get the maximum tax benefit.

Question 7

Debby, age 18, is claimed as a dependent by her mother. During 2018, she earned $1,100 in interest income on a savings account. Debby's standard deduction is $1,450 $1,100 + $350).

Accepted Answer

Even though Debby's earned income is below the standard deduction amount, she cannot claim the standard deduction because she is claimed as a dependent on her mother's tax return. The correct amount of her standard deduction would be $0.

Question 8

Monique is a resident of the U.S. and a citizen of France. If she files a U.S. income tax return, Monique cannot
claim the standard deduction.

Accepted Answer

The answer of Monique is a resident of the U.S....

Question 9

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

Accepted Answer

This is correct according to the IRS rules. The surviving spouse is considered married for the entire year, even if their spouse passed away during that year.

Question 10

Buddy and Hazel are ages 72 and 71 and file a joint return. If they have itemized deductions of $25,100 for 2018, they should not claim the standard deduction.

Accepted Answer

The answer of Buddy and Hazel are ages 72 and...

Question 11

In 2018, Hal furnishes more than half of the support of his ex-wife and her father, both of whom live with him. The divorce occurred in 2017. Hal may claim the father-in-law and the ex-wife as dependents.

Accepted Answer

Hal can claim his ex-wife and father-in-law as dependents because he provides more than half of their support and they both live with him, regardless of the fact that they are his ex-wife and father-in-law. The divorce occurring in 2017 does not affect this eligibility.

Question 12

The deduction for personal and dependency exemptions has been suspended from 2018 through 2025.

Accepted Answer

The Tax Cuts and Jobs Act suspended the deduction for personal and dependency exemptions from 2018 through 2025.

Question 13

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...

Question 14

In determining whether the gross income test is met for determining dependency status, only the taxable portion of a scholarship is considered.

Accepted Answer

Only the taxable portion of a scholarship is considered in determining whether the gross income test is met for determining dependency status.

Question 15

Katrina, age 16, is claimed as a dependent by her parents. During 2018, she earned $5,600 as a checker at a grocery store. Her standard deduction is $5,950 $5,600 earned income + $350).

Accepted Answer

The answer of Katrina, age 16, is claimed as a...

Question 16

Using borrowed funds from a mortgage on her home, Leah provides 52% of her own support, while her sons furnished the rest. Leah can be claimed as a dependent under a multiple support agreement.

Accepted Answer

The answer of Using borrowed funds from a mortgage on...

Question 17

Albert buys his mother a TV. For purposes of meeting the support test, Albert cannot include the cost of the TV.

Accepted Answer

The cost of the TV can be considered part of the total support provided by Albert to his mother, as the support test includes all amounts spent to provide food, lodging, clothing, education, medical and dental care, recreation, transportation, and similar necessities.

Question 18

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 19

Roy and Linda were divorced in 2017. The divorce decree awards custody of their children under age 17) to Linda but is silent as to who is entitled to treat them as dependents for purposes of claiming the child credit. If Roy furnished more than half of their support, he can claim the child tax credit for them in 2018.

Accepted Answer

The divorce decree does not determine who is entitled to claim the child tax credit, but rather the IRS follows specific rules outlined in the tax code. Generally, the custodial parent is entitled to claim the child tax credit unless they sign a waiver allowing the non-custodial parent to claim it. Therefore, in this scenario, Linda would be entitled to claim the child tax credit unless she signs a waiver allowing Roy to claim it.

Question 20

If an individual does not spend funds that have been received from another source

Accepted Answer

If an individual does not spend funds that have been received from another source, then it is true that they have not spent the funds.

Quiz 3: Tax Formula and Tax Determination an Overview of Property Transactions