personal exemption amount False Support provided by the new spouse does enter

Personal exemption amount false support provided by

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personal exemption amount. False. Support provided by the new spouse does enter into the computation. 9. False. Spouses do not qualify as dependents. 10. True. 11. False. Additional standard deductions are not allowed for dependents. 12. False. Only children of the taxpayer qualify for the waiver of the income test. 13. True. 14. True. 15. True. 16. True. 17. True. 18. True. 19. True. 20. False. Surviving spouse status is only available for the two years following the year of death. 21. True. 22. False. Only costs related to the running of the household are considered in determining head of household 23. status. True. 24. False. Parents are not required to live with the taxpayer for head of household status. 25. False. Remarriage removes the possibility of fi ling a joint return with the deceased spouse. 26. True. 27. True. 28. True. 29. True. 30. True. 31.
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418 CCH Federal Taxation—Basic Principles Chapter 3 © 2010 CCH. All Rights Reserved. ANSWERS TO MULTIPLE CHOICE QUESTIONS—CHAPTER 3 b. For 2010, the standard deduction for married taxpayers fi ling a joint return is $11,400. 32. c. The standard deduction for a single person over 65 is $7,100, the 2010 basic deduction of $5,700 plus 33. the additional standard deduction of $1,400 for age. a. The standard deduction for married individuals fi ling separately is $5,700. 34. b. The standard deduction for a head of household is $8,400. 35. c. Since Michael is claimed as a dependent by his parents, he is not allowed a personal exemption and his 36. standard deduction is limited to $950, since this amount is greater than $600 (his earned income of $300 plus $300). Interest income $2,000 Wages 300 Less: Standard deduction 950 Taxable income $1,350 c. Since Marvin is claimed as a dependent by his parents, he is not allowed a personal exemption. His 37. itemized deductions exceed his $950 standard deduction. Trust fund income $3,100 Wages 500 Less: Itemized deduction 1,050 Taxable income $2,550 c. John is allowed an exemption for each of his parents. 38. b. Two personal exemptions may be claimed. A taxpayer is allowed to claim all the personal exemptions 39. that a person is eligible to take at time of death. c. Not allowed to claim the personal exemption for an employee. 40. a. Expenditures for recreation qualify as support. 41. c. Alfred is not eligible for the multiple support agreement because he did not contribute over 10 percent of 42. the support. d. Max does not have a dependent child to qualify for surviving spouse status. He must claim his father as 43. a dependent to qualify for head of household status. d. Home ownership is not a requirement of surviving spouse status. 44. d. The taxpayer’s dependent parents need not live with the taxpayer to enable the taxpayer to qualify as a 45. head of household. d. The daughter must be a dependent for Nellie to qualify as surviving spouse but this requirement is not 46. necessary for quali fi cation as head of household. b. OASDI self-employment tax is imposed on the lesser of the net earnings from self-employment or 47. $106,800 minus income subject to social security taxes. The hospital insurance self-employment tax is imposed on self-employment income (in Andy’s case, $20,000 × .9235, or $18,470).
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419 Testbank © 2010 CCH. All Rights Reserved. Chapter 3 Maximum subject to OASDI self-employment tax $106,800.00 Less: Income subject to social security 97,200.00 Amount subject to OASDI self-employment tax $9,600.00
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