Midterm-a - Midterm Exam Answer Section MULTIPLE CHOICE 1....

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Midterm Exam Answer Section MULTIPLE CHOICE 1. ANS: B Anna does not meet the “abandoned spouse” rules. Therefore, she cannot file as a head of household. Her filing status is married, filing separately. PTS: 1 2. ANS: C PTS: 1 3. ANS: E Most exclusions are not reported on Form 1040, but those that are appear on page 1—not on page 2 (choice a.). A “page 1 deduction” as well as an “above the line deduction” are deductions for AGI (choices b. and c.). AGI, not TI, is at the bottom of page 1 and the top of page 2 of Form 1040 (choice d.). PTS: 1 4. ANS: D In the year of divorce, a former spouse cannot qualify under the member of the household test (choice a.). The stepmother meets the relationship test (choice b.). A married daughter can be claimed as long as she does not violate the joint return test (choice c.). In the case of the half brother, Canada or Mexico can satisfy the residency test (choice d.). A cousin does not satisfy the relationship test so must be a member of the household (choice e.). PTS: 1 5. ANS: D Neither the stock dividend nor the stock split is taxable. PTS: 1 6. ANS: C Four (Troy, Edie, Jobeth, and the father). Jobeth can be claimed because as a qualifying child she is not subject to the gross income test. Troy’s cousin does not meet the relationship test and is not a member of their household. It is assumed that Edie’s father, as was true in the past, qualified as a dependent up to the point of death. PTS: 1 7. ANS: B Weston does not qualify because he does not contribute more than 10% of the support. (This eliminates choices a. and c.) Jake does not qualify because he satisfies neither the relationship nor member of the household tests. (This eliminates choices a. and d.) Brayden does not meet the relationship test, but he does satisfy the member of the household test. PTS: 1 8. ANS: A
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Alimony payments (choice a.) are deductions for AGI. Child support payments (choice b.), funeral expenses (choice c.), and personal capital losses (choice d.) are nondeductible items. PTS:
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This note was uploaded on 02/02/2010 for the course ACCT 1B taught by Professor Bobd during the Spring '09 term at Las Positas College.

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Midterm-a - Midterm Exam Answer Section MULTIPLE CHOICE 1....

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