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

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Question 81

True/False

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All exclusions from gross income are reported on Form 1040.

A) True
B) False

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Question 82

Multiple Choice

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

A) Married persons who file joint returns cannot later (after the due date of the return) substitute separate returns.
B) Married persons who file separate returns can later (after the due date of the return) substitute a joint return.
C) The usual test as to when a taxpayer must file a return is based on the total of the following: personal exemption + basic standard deduction + both additional standard deductions.
D) Special filing requirement rules exist for taxpayers who are claimed as dependents of another.
E) None of the above.

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

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Question 83

Multiple Choice

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Arnold is married to Sybil,who abandoned him in 2011.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 $6,000 each year.For tax year 2012,Arnold's filing status is:

Regarding the Tax Tables applicable to the Federal income tax,which of the following statements is correct?

Lena is 66 years of age,single,and blind and is not claimed as a dependent.How much gross income must she have before she is required to file a Federal income tax return for 2012?

In 2012,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 2011.Hal may claim the father-in-law and the ex-wife as dependents.

When married persons file a joint return,joint and several liability results.What does this mean?

Katrina,age 16,is claimed as a dependent by her parents.During 2012,she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,900 ($5,600 earned income + $300).

For 2012,Jackson has taxable income of $30,005.When he uses the Tax Tables,Jackson finds that his tax liability is higher than under the Tax Rate Schedules.

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 2012 is $15,350 ($11,900 + $1,150 + $1,150 + $1,150).

In 2012,Warren sold his personal use automobile for a loss of $9,000.He also sold a personal coin collection for a gain of $10,000.As a result of these sales,$1,000 is subject to income tax.

A qualifying child cannot include:

Surviving spouse filing status begins in the year in which the deceased spouse died.