1. Under the Federal income tax formula for individuals, a choice must be made between claiming deductions forAGI and itemized deductions.
a. True
b. False
2. Under the Federal income tax formula for individuals, the determination of adjusted gross income (AGI) precedes that of taxable income (TI).
a. True
b. False
3. Under the income tax formula, a taxpayer must choose between deductions forAGI and the standard deduction.
a. True
b. False
.
4. After Ellie moves out of the apartment she had rented as her personal residence, she recovers her damage deposit of $1,000. The $1,000 is not income to Ellie.
a. True
b. False
5. An above the line deduction refers to a deduction forAGI.
a. True
b. False
6. Because they appear on page 1 of Form 1040, itemized deductions are also referred to as page 1 deductions.
a. True
b. False
7. A decrease in a taxpayers AGI could increase the amount of medical expenses that can be deducted.
a. True
b. False
8. An increase in a taxpayers AGI could decrease the amount of charitable contribution that can be claimed.
a. True
b. False
9. All exclusions from gross income are reported on Form 1040.
a. True
b. False
10.The filing status of a taxpayer (e.g., single, head of household) must be identified before the applicable standard deduction is determined.
a. True
b. False
11.Lee, a citizen of Korea, is a resident of the U.S. Any rent income Lee receives from land he owns in Korea is not subject to the U.S. income tax.
a. True
b. False
12.The additional standard deduction for age and blindness is greater for married taxpayers than for single taxpayers.
a. True
b. False
13. The basicand additionalstandard deductions both aresubject to an annual adjustment for inflation.
a. True
b. False
14.Many taxpayers who previously itemized will start claiming the standard deduction when they purchase a home.
a. True
b. False
.
15.Once they reach age 65, many taxpayers will switch from itemizing their deductions fromAGI and start claiming the standard deduction.
a. True
b. False
16.Claudes deductions fromAGI exceed the standard deduction allowed for 2014. Under these circumstances, Claude cannot claim the standard deduction.
a. True
b. False
17.As opposed to itemizing deductions fromAGI, the majority of individual taxpayers choose the standard deduction.
a. True
b. False
18.Howard, age 82, dies on January 2, 2014. On Howards 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.
a. True
b. False
19.In 2014, Ed is 66 and single. If he has itemized deductions of $7,400, he should notclaim the standard deduction alternative.
a. True
b. False
20.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 2014 is $16,000 ($12,400 + $1,200 + $1,200 + $1,200).
a. True
b. False
21.Derek, age 46, is a surviving spouse. If he has itemized deductions of $12,700 for 2014, Derek should notclaim the standard deduction.
a. True
b. False
22.Buddy and Hazel are ages 72 and 71 and file a joint return. If they have itemized deductions of $14,600 for 2014, they should notclaim the standard deduction.
a. True
b. False
23.Clara, age 68, claims head of household filing status. If she has itemized deductions of $10,250 for 2014, she should notclaim the standard deduction.
a. True
b. False
24.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.
a. True
b. False
25.Dan and Donna are husband and wife and file separate returns for the year. If Dan itemizes his deductions from AGI, Donna cannotclaim the standard deduction.
a. True
b. False
26.Benjamin, age 16, is claimed as a dependent by his parents. During 2014, he earned $700 at a car wash.
Benjamins standard deduction is $1,350 ($1,000 + $350).
a. True
b. False
27.Debby, age 18, is claimed as a dependent by her mother. During 2014, she earned $1,100 in interest income on a savings account. Debbys standard deduction is $1,450 ($1,100 + $350).
a. True
b. False
28.Katrina, age 16, is claimed as a dependent by her parents. During 2014, she earned $5,600 as a checker at a grocery store. Her standard deduction is $5,950 ($5,600 earned income + $350).
a. True
b. False
29.A dependent cannotclaim a personal exemption on his or her own return.
a. True
b. False
30.When separate income tax returns are filed by married taxpayers, one spouse cannotclaim the other spouse as an exemption.
a. True
b. False
31.Butch and Minerva are divorced in December of 2014. Since they were married for more than one-half of the year, they are considered as married for 2014.
a. True
b. False
.
32.For the year a spouse dies, the surviving spouse is considered married for the entire year for income tax purposes.
a. True
b. False
33.In determining whether the gross income test is met for dependency exemption purposes, only the taxable portion of a scholarship is considered.
a. True
b. False
34.Albert buys his mother a TV. For purposes of meeting the support test, Albert cannot include the cost of the TV.
a. True
b. False
35.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.
a. True
b. False
.
36.Roy and Linda were divorced in 2013. The divorce decree awards custody of their children to Linda but is silent as to who is entitled to claim them as dependents. If Roy furnished more than half of their support, he can claim them as dependents in 2014.
a. True
b. False
37.In 2014, 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 2013. Hal may claim the father-in-law and the ex-wife as dependents.
a. True
b. False
38.After her divorce, Hope continues to support her exhusbands sister, Cindy, who does not live with her. Hope can claim Cindy as a dependent.
a. True
b. False
39.Darren, age 20 and not disabled, earns $4,000 during 2014. Darrens parents cannotclaim him as a dependent unless he is a full-time student.
a. True
b. False
40.Lucas, age 17 and single, earns $6,000 during 2014. Lucass parents cannot claim him as a dependent if he does not live with them.
a. True
b. False