CHAPTER 2 PRACTICE QUIZZES

CHAPTER 2 PRACTICE QUIZZES -...

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1. Olivia and Doug are in the process of obtaining a divorce. They were still  married as of the end of last year, although no longer living together. Olivia is  currently having some legal difficulty due to her high-level position in a  corporation that is being investigated for misrepresenting the fair value of  various securities. In April, Olivia sends Doug a completed income tax return  with Married-Filing Jointly status and asks him to sign the return. What  advice would you give Doug? Your Answer: <0>   Olivia and Doug can legally claim Married-Filing Jointly status which will  usually result in lower taxes than Married Filing Separately. However, Doug  may not wish to sign such a return. Doing so makes him liable both jointly  (together with Olivia) and severally (100% on his own) for all the taxes on the  return. If Olivia failed to properly report her income and pay her share of  taxes, Doug may be liable for the entire amount of taxes owed if he signed  the return. While he may be able to claim innocent spouse relief, this status  is not necessarily easy to prove. To protect himself, Doug may wish to insist 
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CHAPTER 2 PRACTICE QUIZZES -...

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