Federal Taxation: Basic Principles (2009)

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lkj True/False Indicate whether the sentence or statement is true or false. ____ 1. As used in the income tax formula, gross income would not include amounts borrowed by a taxpayer on a bank loan. ____ 2. A change in the amount of a taxpayer's AGI will not affect the amount of medical expense deduction that is allowed. ____ 3. The amount of the standard deduction allowed does vary with the filing status of the taxpayer involved. ____ 4. In 2003, Minnie is 75 and single. If she has itemized deductions of $5,500, she should claim the standard de- duction alternative. ____ 5. Colin (age 70) and Ashby (age 66) are married and file a joint return for 2003. If they have itemized deduc- tions of $10,000, they should not claim the standard deduction. ____ 6. Lope is a citizen of Spain and a resident of the U.S. If he files a U.S. income tax return, Lope can claim the standard deduction. ____ 7. Gwen, a widow, dies on January 7, 2003. Even though she lived for only a week, her final income tax return can claim the full amount of the standard deduction for 2003. ____ 8. A dependent cannot claim a personal exemption on his or her own return. ____ 9. Jean and Grady are divorced in December of 2003. Since they were married for most of the year, they are considered married for 2003. ____ 10. For the year a spouse dies, the surviving spouse is considered married for the entire year for income tax pur- poses. ____ 11. If the individual does not spend funds that have been received from another source (e.g., Social Security bene- fits), the unexpended amounts are not counted for purposes of the support test. ____ 12. After her divorce, Hope continues to support her ex-husband's sister, Cindy, who does not live with her. Hope cannot claim Cindy as a dependent. ____ 13. Devon, age 18 and single, earns $4,000 during 2003. Devon's parents can claim him as a dependent if they meet the support test. ____ 14. Enrique, a resident of Arizona, supports his parents who are residents of Mexico but citizens of Guatemala. Enrique may claim his parents as dependents. ____ 15. Surviving spouse filing status begins in the year in which the survivor's spouse died. ____ 16. Surviving spouse filing status can continue only for the two years following the year of the spouse's death. ____ 17. Perry is single and maintains the household where he and his sister live. The sister does not qualify as a de- pendent. Perry does not qualify for head of household filing status. ____ 18. Mamie is divorced and lives alone. She maintains an apartment in which her dependent son lives. Mamie can qualify for head of household filing status. Multiple Choice Identify the letter of the choice that best completes the statement or answers the question.
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____ 19. Which, if any, of the following is not a deduction for AGI? a.
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ch-08-prac-ques-f05 - lkj True/False Indicate whether the...

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