Question 1

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

Accepted Answer

As a resident of the United States, Monique may claim the standard deduction on her U.S. income tax return, even if she is also a citizen of France.

Question 2

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

Accepted Answer

The Tax Cuts and Jobs Act of 2017 suspended the deduction for personal and dependency exemptions from 2018 through 2025.

Question 3

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 4

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 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 2019 is $28,300 ($24,400 + $1,300 + $1,300 + $1,300).

Accepted Answer

According to the IRS, for tax year 2019, the standard deduction for married couples filing jointly who are both 65 or older and/or blind is $27,000 ($24,400 + $1,300 + $1,300). However, if only one spouse is 65 or older and/or blind, the standard deduction increases to $28,200. Since Jason is blind, their standard deduction for 2019 would be $28,200, which is greater than $28,300.

Question 6

Derek, age 46, is a surviving spouse.If he has itemized deductions of $26,250 for 2019, Derek should not claim the standard deduction.

Accepted Answer

The standard deduction for a surviving spouse in 2019 is $24,400, so if Derek has itemized deductions of $26,250, it would be more advantageous for him to itemize rather than take the standard deduction.

Question 7

Buddy and Hazel are ages 72 and 71, respectively, and file a joint return.If they have itemized deductions of $25,100 for 2019, they should not claim the standard deduction.

Accepted Answer

For the tax year 2019, the standard deduction for married couples filing jointly was $24,400. Since Buddy and Hazel's itemized deductions ($25,100) are higher than the standard deduction, they can claim the itemized deductions, making the statement false.

Question 8

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 9

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

Accepted Answer

A multiple support agreement allows two or more taxpayers who provide more than 50% of a person's support together to agree on who among them can claim the person as a dependent. Since Leah provides more than 50% of her own support, she cannot be considered a dependent under a multiple support agreement.

Question 10

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

Accepted Answer

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

Question 11

Butch and Minerva divorced in December 2019.Since they were married for more than one-half of the year, they are considered as married for 2019.

Accepted Answer

The answer of Butch and Minerva divorced in December 2019.Since...

Question 12

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

Accepted Answer

If an individual receives funds but does not spend them, such as interest on municipal bonds, those unexpended amounts are not considered for the support test.

Question 13

In 2019, 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 2018.Hal may claim the father-in-law and the ex-wife as dependents.

Accepted Answer

According to the IRS, a taxpayer may claim a dependency exemption for a former spouse if they provided more than half of that person's total support for the year. Additionally, a taxpayer may claim a dependency exemption for a parent if they provided more than half of that person's total support for the year and the parent's gross income is less than the exemption amount. Since Hal furnishes more than half of the support for both his ex-wife and her father, and they both live with him, he may claim them both as dependents on his tax return.

Question 14

Clara, age 68, claims head of household filing status.If she has itemized deductions of $18,900 for 2019, she should claim the standard deduction.

Accepted Answer

For the 2019 tax year, the standard deduction for a head of household aged 65 or older was $19,400, which is higher than her itemized deductions of $18,900. Therefore, she should claim the standard deduction.

Question 15

Benjamin, age 16, is claimed as a dependent by his parents.During 2019, he earned $850 at a car wash.Benjamin's standard deduction is $1,450 ($1,100 + $350).

Accepted Answer

For 2019, the standard deduction for a single individual who can be claimed as a dependent by another taxpayer is the greater of $1,100 or the individual's earned income plus $350, but not to exceed the regular standard deduction amount for an unclaimed single individual, which was $12,200 for 2019. Therefore, Benjamin's standard deduction would be his earned income ($850) plus $350, totaling $1,200, not $1,450.

Question 16

Roy and Linda divorced in 2018.The divorce decree awards custody of their children (all under age 17) to Linda but is silent as to who is entitled to treat them as dependents for purposes of claiming the child tax credit.If Roy furnished more than half of their support, he can claim the child tax credit for them in 2019.

Accepted Answer

The divorce decree is silent on who is entitled to claim the child tax credit, so the default rule applies, which is that the custodial parent is entitled to claim the child tax credit unless they release the claim to the non-custodial parent using IRS Form 8332. Therefore, unless Linda releases the claim to Roy, he cannot claim the child tax credit for the children in 2019. The fact that Roy furnished more than half of their support is not relevant in this case.

Question 17

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

Accepted Answer

According to the IRS, the surviving spouse is considered married for the entire year in which their spouse died, regardless of the date of death. They can also file a joint tax return for that year if they choose to do so.

Question 18

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, then the other spouse must also itemize their deductions or forego the standard deduction. So, if Dan itemizes his deductions, Donna cannot claim the standard deduction.

Question 19

Debby, age 18, is claimed as a dependent by her mother.During 2019, Debby earned $1,200 in interest income on a savings account.Her standard deduction is $1,550 ($1,200 + $350).

Accepted Answer

Debby's standard deduction cannot exceed her earned income, so her standard deduction would be $350 (the minimum for a dependent with earned income) rather than $1,550.

Question 20

Katrina, age 16, is claimed as a dependent by her parents.During 2019, 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 standard deduction for someone who can be claimed as a dependent on someone else's tax return is their earned income plus $350, but not more than the basic standard deduction for an individual who is not a dependent, which was $12,200 for 2019. Therefore, Katrina's standard deduction calculation of $5,600 (earned income) + $350 = $5,950 is correct.

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