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Exam 9: Individuals As the Taxpayer

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Question 31

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Which of the following taxpayers may file as a head of household in 2018? Marco provides all the support for his mother, Sienna, who lives by herself in an apartment in Fort Lauderdale.Marco 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 2018 working at a fast food restaurant and is saving his money to attend college in 2019.Dan lives in Tammy's home. Juan's wife left him late in December of 2017.No legal action was taken and Juan has not heard from her in 2018.Juan supported his 6-year-old son, who lived with him throughout 2018.

A) Marco only
B) Tammy only
C) Juan only
D) Marco and Juan only
E) Marco, Tammy, and Juan

F) A) and B)
G) B) and D)

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Question 32

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After personal property is fully depreciated for both regular income tax purposes and AMT purposes, no AMT adjustment will be required as a result of the sale of the property.

A) True
B) False

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Question 33

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Married taxpayers who file separately cannot later i.e., after the due date for filing) change to a joint return.

Katelyn is divorced and maintains a household in which she and her daughter, Crissa, live.Crissa, age 22, earns $11,000 during 2018 as a model.Katelyn does not qualify for head of household filing status.

The kiddie tax does not apply to a child whose earned income is more than one-half of his or her support.

Howard, age 82, dies on January 2, 2018.On Howard's final income tax return, the full amount of the basic and additional standard deductions will be allowed even though Howard lived for only 2 days during the year.

AMT adjustments can be positive or negative, whereas AMT preferences always are positive.

Since an abandoned spouse is treated as not married and has one or more dependent children, he or she qualifies for the standard deduction available to head of household.

A taxpayer who itemizes must use Form 1040, and cannot use Form 1040EZ or Form 1040A.

An increase in a taxpayer's AGI could decrease the amount of charitable contribution that can be claimed.

Under the Federal income tax formula for individuals, the determination of adjusted gross income AGI) precedes that of taxable income TI).

Tony, age 15, is claimed as a dependent by his grandmother.During 2018, Tony had interest income from Boeing Corporation bonds of $1,000 and earnings from a part-time job of $800.Tony's taxable income is:

Jeremy is married to Amy, who abandoned him in 2017.He has not seen or communicated with her since April of that year.He maintains a household in which their son, Evan, lives.Evan is age 25 and earns over $6,000 each year.For tax year 2018, Jeremy's filing status is:

Assuming no phaseout, the AMT exemption amount for a married taxpayer filing separately for 2018 is the same as the AMT exemption amount for married taxpayer filing jointly filing status.

The standard deduction is allowed for regular income tax purposes, but is disallowed for AMT purposes.This results in a positive AMT adjustment.

In terms of the tax formula applicable to individual taxpayers, which, if any, of the following statements is correct?

Hannah, age 70 and single, is claimed as a dependent by her daughter.During 2018, she had interest income of $2,550 and $800 of earned income from babysitting.Hannah's taxable income is:

Regarding the rules applicable to filing of income tax returns, which, if any, of the following is an incorrect statement:

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

When the kiddie tax applies, the child need not file an income tax return because the child's income will be reported on the parents' return.