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The basic and additional standard deductions both are subject to an annual adjustment for inflation.

A) True
B) False

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The additional standard deduction for age and blindness is greater for married taxpayers than for single taxpayers.

A) True
B) False

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False

Which of the following, if any, is a deduction for AGI?


A) State and local sales taxes.
B) Interest on home mortgage.
C) Charitable contributions.
D) Unreimbursed moving expenses of an employee (not in the military) .
E) None of these.

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

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Gain on the sale of collectibles held for more than 12 months always is subject to a tax rate of 28%.

A) True
B) False

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For the current year, David has wages of $80,000 and the following property transactions: Stock investment sales- Long-term capital gain ..........$9000 Short-term capital loss .........(12000) Loss on sale of camper (purchased four years ago and used for family vacations ) ...................(2000) What is David's AGI for the current year?


A) $76,000.
B) $77,000.
C) $78,000.
D) $89,000.
E) None of these.

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

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B

A decrease in a taxpayer's AGI could increase the amount of medical expenses that can be deducted.

A) True
B) False

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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

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True

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

A) True
B) False

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Regarding the tax formula and its relationship to Form 1040, which of the following statements, if any, is correct?


A) Most exclusions from gross income are reported on page 2 of Form 1040.
B) An above-the-line deduction refers to a deduction from AGI.
C) A "Schedule 1 deduction" refers to a deduction for AGI.
D) A taxpayer's AGI amount appears both at the bottom of page 1 and at the top of page 2 of Form 1040.
E) None of these.

F) A) and B)
G) None of the above

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Match the statements that relate to each other.Note: Some choices may be used more than once. -Additional standard deduction


A) Not available to 65-year old taxpayer who itemizes.
B) Exception for U.S.citizenship or residency test (for dependency exemption purposes) .
C) Largest basic standard deduction available to a dependent who has no earned income in 2019.
D) Considered for dependency purposes.
E) Qualifies for head of household filing status.
F) A child (age 15) who is a dependent and has only earned income.
G) Considered in applying gross income test (for dependency exemption purposes) .
H) Not considered in applying the gross income test (for dependency exemption purposes) .
I) Unmarried taxpayer who can use the same tax rates as married persons filing jointly.
J) Exception to the support test (for dependency exemption purposes) .
K) A child (age 16) who is a dependent and has only unearned income of $4,500.
L) No correct match provided.

M) A) and J)
N) C) and J)

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Regarding the rules applicable to filing of income tax returns, which of the following, if any, 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 these.

F) C) and E)
G) B) and E)

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Matching Regarding classification as a dependent, classify each statement in one of the four categories: -A granddaughter, who lives with taxpayer, is 19 years old, earns $5,000, and is not a full-time student.


A) Could be a qualifying child.
B) Could be a qualifying relative.
C) Could be either a qualifying child or a qualifying relative.
D) Could be neither a qualifying child nor a qualifying relative.

E) None of the above
F) A) and B)

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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.

A) True
B) False

Correct Answer

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Under the income tax formula, a taxpayer must choose between deductions for AGI and the standard deduction.

A) True
B) False

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For dependents who have income, special filing requirements apply.

A) True
B) False

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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

Correct Answer

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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.

A) True
B) False

Correct Answer

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In terms of income tax consequences, abandoned spouses are treated the same way as married persons filing separate returns.

A) True
B) False

Correct Answer

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Lee, a citizen of Korea, is a resident of the United States.Any rent income Lee receives from land he owns in Korea is not subject to the U.S.income tax.

A) True
B) False

Correct Answer

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Lucas, age 17 and single, earns $6,000 during 2019.His parents cannot claim him as a dependent if he does not live with them.

A) True
B) False

Correct Answer

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