Ch03TB - 537 Chapter 3 Individual TaxationAn Overview...

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© 2009 CCH. All Rights Reserved. Chapter 3 537 Chapter 3 Individual Taxation—An Overview TRUE-FALSE QUESTIONS—CHAPTER 3 Taxpayers are allowed to take the larger of their itemized deductions or the standard deduction. 1. If no one person contributes more than half the support of a dependent, the exemption may never be claimed by 2. anyone. To qualify as a student for federal income tax purposes, the child must be a full-time student for at least some part of 3. each f ve calendar months of the calendar year. The period of time for which support is furnished, not the total cost of support, is the deciding factor in determining if 4. over 50 percent of total support is provided. If a dependent died before the last day of the year, the dependency exemption may not be claimed since the status on 5. December 31 determines entitlement to the deduction. In determining who furnishes more than 50 percent of the total support of a child who is a full-time student, 6. scholarships received by the child must be considered as part of his or her support. Funds used for support which a student borrows from a bank must be considered as part of his or her support. 7. If a child is a full-time student, an exemption may be claimed for the child regardless of the amount of student’s gross 8. income if he or she meets all the other tests for dependency. A divorced parent having custody who remarries is not allowed to consider support provided by the new spouse in 9. determining who contributed over half the support of the children from the previous marriage. 10. An individual who is divorced or legally separated at the end of the year may claim his former wife’s exemption if 10. he contributed over half of her support. Each personal exemption for 2009 is worth $3,650. 11. A taxpayer is allowed an additional standard deduction for a dependent grandmother who is 70 years old. 12. A taxpayer is allowed a dependency exemption for a brother for whom over half the support was paid even if the 13. brother earned more than $3,500 while a full-time student. An 18-year-old child may be claimed as a dependent if the child had gross income of $3,750, provided the other 14. dependency tests are met. A person who is a member of the household and lives with the taxpayer for the entire year need not be related to the 15. taxpayer to be claimed as a dependent. If husband and wife f le separate returns, both must either itemize or choose the standard deduction. 16. An abandoned spouse, even though f ling separately, will be allowed to use the standard deduction, without regard to 17. whether the deserter spouse itemizes. To qualify as an abandoned spouse, the taxpayer must furnish more than half the support of a household that is the 18. principal abode of a dependent child.
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This note was uploaded on 08/04/2010 for the course ACTG 311 taught by Professor Neal during the Spring '10 term at N.E. Illinois.

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Ch03TB - 537 Chapter 3 Individual TaxationAn Overview...

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