Question 1

Nelda is married to Chad,who abandoned her in early June of 2010.She has not seen or communicated with him since then.She maintains a household in which she and her two dependent children live.Which of the following statements about Nelda's filing status in 2010 is correct?

Accepted Answer

Nelda can file as head of household because she maintained a household for her dependent children and lived apart from her husband for the last six months of the year. She does not qualify as a surviving spouse because she is not legally separated from her husband or widowed. She cannot file a joint return with her estranged husband as he has abandoned her and she has no means of communicating with him. She cannot use rates for single taxpayers as she has dependents.

Question 2

During 2010,Trevor has the following capital transactions:  After the netting process,the following results:

Accepted Answer

The answer of During 2010,Trevor has the following capital transactions:...

Question 3

Which,if any,of the following is a correct statement relating to the kiddie tax?

Accepted Answer

The kiddie tax does not apply if both parents of the child are deceased.

Question 4

For the qualifying relative rule (for dependency exemption purposes):

Accepted Answer

The qualifying relative does not need to reside with the taxpayer, but they must meet other criteria such as having less than $4,300 in gross income and receiving more than half of their support from the taxpayer. The other options listed are not correct because the dependent can be any age, do not have to be related, and do not need to be a citizen or resident of the U.S.

Question 5

Kirby is in the 15% tax bracket and had the following capital asset transactions during 2010:  Kirby's tax consequences from these gains are as follows:

Accepted Answer

The capital gain from the sale of the stock ($10,000) is within the 0% tax bracket, as Kirby is in the 15% tax bracket and the capital gain is less than $36,900 for single filers. The capital gain from the sale of the land ($13,000) is within Kirby's tax bracket, so it is taxed at 15%. Therefore, the total tax consequences are (0% * $10,000) + (15% * $13,000) = $1,950. Option A is incorrect because it applies the 5% tax rate to the entire capital gain, which is incorrect. Option C is incorrect because it applies the 28% tax rate to the entire capital gain, which is also incorrect. Option D is incorrect because it does not take into account the different tax rates for the two transactions.

Question 6

Karen had the following transactions for 2010:
  What is Karen's AGI for 2010?

Accepted Answer

The answer of Karen had the following transactions for 2010:
...

Question 7

Emma had the following transactions during 2010:
  What is Emma's AGI for 2010?

Accepted Answer

The answer of Emma had the following transactions during 2010:
...

Question 8

In which,if any,of the following situations will the kiddie tax not apply?

Accepted Answer

The answer of In which,if any,of the following situations will...

Question 9

The Hutters filed a joint return for 2010.They provide more than 50% of the support of Carla,Melvin,and Aaron.Carla (age 18)is a cousin and earns $5,000 from a part-time job.Melvin (age 25)is their son and is a full-time law student.He received from the university a $3,800 scholarship for tuition.Aaron is a brother who is a citizen of Israel but resides in France.Carla and Melvin live with the Hutters.How many personal and dependency exemptions can the Hutters claim on their Federal income tax return?

Accepted Answer

The Hutters can claim three exemptions: one for each of themselves and one for Melvin, who qualifies as a dependent child under the IRS rules for a full-time student under age 24. Carla does not qualify as a dependent because she is a cousin, and Aaron does not qualify because he is not a U.S. resident.

Question 10

For the current year,David has salary income of $80,000 and the following property transactions:  What is David's AGI for the current year?

Accepted Answer

AGI (Adjusted Gross Income) is calculated by subtracting any adjustments (such as contributions to retirement accounts) from gross income. In this case, the only information given is David's salary income of $80,000 and the property transactions. However, there are not enough details about the property transactions to determine if they would result in any adjustments to his gross income.

Therefore, we can assume that David's AGI is simply his gross income of $80,000. However, since that answer is not one of the choices, we must pick the closest option, which is C, $78,000.

Question 11

Which of the following taxpayers may file as a head of household in 2010? Ron provides all the support for his mother,Betty,who lives by herself in an apartment in Fort Lauderdale.Ron pays the rent and other expenses for the apartment and properly claims his mother as a dependent.
Tammy provides over one-half the support for her 18-year old brother,Dan.Dan earned $4,200 in 2010 working at a fast food restaurant and is saving his money to attend college in 2011.Dan lives in Tammy's home.
Joe's wife left him late in December of 2009.No legal action was taken and Joe has not heard from her in 2010.Joe supported his 6-year-old son,who lived with him throughout 2010.

Accepted Answer

The answer of Which of the following taxpayers may file...

Question 12

Perry is in the 33% tax bracket.During 2010,he had the following capital asset transactions:  Perry's tax consequences from these gains are as follows:

Accepted Answer

The answer of Perry is in the 33% tax bracket.During...

Question 13

Kyle,whose wife died in December 2007,filed a joint tax return for 2007.He did not remarry,but has continued to maintain his home in which his two dependent children live.What is Kyle's filing status as to 2010?

Accepted Answer

In 2010, Kyle's filing status would be "Head of Household" because he did not remarry and has maintained a home for his dependent children. The "Surviving Spouse" status is only applicable for two years following the year of the spouse's death, which would be 2008 and 2009 in this case.

Question 14

A qualifying child cannot include:

Accepted Answer

The answer of A qualifying child cannot include:
...

Question 15

Ellen,age 12,lives in the same household with her father,grandfather,and uncle.The cost of maintaining the household is provided by her grandfather (40%)and her uncle (60%).Disregarding tie-breaker rules,Ellen is a qualifying child as to:

Accepted Answer

Ellen is a qualifying child for all parties involved because she lives with her father, grandfather, and uncle, and they all have a familial relationship with her. The cost of maintaining the household does not affect her status as a qualifying child for each of them.

Question 16

Millie,age 80,is supported during the current year as follows:  During the year,Millie lives in an assisted living facility.Under a multiple support agreement,indicate which parties can qualify to claim Millie as a dependent.

Accepted Answer

The answer of Millie,age 80,is supported during the current year...

Question 17

Robert had the following transactions for 2010:
  What is Robert's AGI for 2010?

Accepted Answer

The answer of Robert had the following transactions for 2010:
...

Question 18

Emily,whose husband died in December 2010,maintains a household in which her dependent daughter lives.Which (if any)of the following is her filing status for the tax year 2010? (Note: Emily is the executor of her husband's estate. )

Accepted Answer

For the tax year 2010, Emily can file as "Married, filing jointly" because her husband passed away during that year, and they were married at the time of his death.

Question 19

During the year,Kim sold the following assets: business auto for a $1,000 loss,stock investment for a $1,000 loss,and pleasure yacht for a $1,000 loss.Presuming adequate income,how much of these losses may Kim claim?

Accepted Answer

The answer of During the year,Kim sold the following assets:...

Question 20

Arnold is married to Sybil,who abandoned him in 2008.He has not seen or communicated with her since April of that year.He maintains a household in which their son,Evans,lives.Evans is age 25 and earns over $20,000 each year.For tax year 2010,Arnold's filing status is:

Accepted Answer

Arnold is still legally married to Sybil, so he cannot file as single or head of household. Since they have not communicated, he cannot file jointly, leaving "married, filing separately" as the correct status.

Quiz 3: Computing the Tax

Nelda is married to Chad,who abandoned her in early June of 2010.She has not seen or communicated with him since then.She maintains a household in which she and her two dependent children live.Which of the following statements about Nelda's filing status in 2010 is correct?

During 2010,Trevor has the following capital transactions: After the netting process,the following results:

Which,if any,of the following is a correct statement relating to the kiddie tax?

For the qualifying relative rule (for dependency exemption purposes) :

Kirby is in the 15% tax bracket and had the following capital asset transactions during 2010: Kirby's tax consequences from these gains are as follows:

Karen had the following transactions for 2010: What is Karen's AGI for 2010?

Emma had the following transactions during 2010: What is Emma's AGI for 2010?

In which,if any,of the following situations will the kiddie tax not apply?

For the current year,David has salary income of $80,000 and the following property transactions: What is David's AGI for the current year?

Perry is in the 33% tax bracket.During 2010,he had the following capital asset transactions: Perry's tax consequences from these gains are as follows:

Kyle,whose wife died in December 2007,filed a joint tax return for 2007.He did not remarry,but has continued to maintain his home in which his two dependent children live.What is Kyle's filing status as to 2010?

A qualifying child cannot include:

Ellen,age 12,lives in the same household with her father,grandfather,and uncle.The cost of maintaining the household is provided by her grandfather (40%) and her uncle (60%) .Disregarding tie-breaker rules,Ellen is a qualifying child as to:

Millie,age 80,is supported during the current year as follows: During the year,Millie lives in an assisted living facility.Under a multiple support agreement,indicate which parties can qualify to claim Millie as a dependent.

Robert had the following transactions for 2010: What is Robert's AGI for 2010?

Emily,whose husband died in December 2010,maintains a household in which her dependent daughter lives.Which (if any) of the following is her filing status for the tax year 2010? (Note: Emily is the executor of her husband's estate. )

During the year,Kim sold the following assets: business auto for a $1,000 loss,stock investment for a $1,000 loss,and pleasure yacht for a $1,000 loss.Presuming adequate income,how much of these losses may Kim claim?

Arnold is married to Sybil,who abandoned him in 2008.He has not seen or communicated with her since April of that year.He maintains a household in which their son,Evans,lives.Evans is age 25 and earns over $20,000 each year.For tax year 2010,Arnold's filing status is: