Taxation of Individuals Discussion Questions

Taxation of Individuals Discussion Questions
Taxation of Individuals Discussion Questions
. Theresa and John were single for all of Year 12 and lived mostly apart
until December 31 when they flew to Las Vegas and were married shortly |
before midnight. What is Theresa and John’s filing status for Year 12?
(A) married filing jointly
(B) head of household
(C) single
(D) married filing separately
. Gil Gallon’s wife died in Year 1. Gil Gallon did not remarry. He continued |
to maintain a home for himself and his dependent infant child during Year 1 _
and Year 2, providing full support for himself and his child during these
years. Gil Gallon’s filing status for Year 2 is
(A) single
(B) head of household
(C) married filing jointly
(D) qualifying widower with dependent child
_ Bonnie’s husband died in Year 1. She did not remarry. She continued to
maintain a home for herself and her dependent infant child during Year 2,1
Year 3, and Year 4, providing full support for herself and her child during |
these three years. For Year 4, Bonnie’s filing status is |
(A) single
(B) head of household
(C) qualifying widow with dependent child
(D) married filing jointly
Z > McGraw-Hill Education 500 Regulation Questions for the CPA Exam
4, In Year 8, Kathleen and Lee were married and had four dependent children. On May 1, Year 8, Lee packed his bags and abruptly deserted his
a | His whereabouts were still unknown to Kathleen at the time she
filed her Year 8 income tax return in February of Year 9. What is the most
advantageous filing status that Kathleen is legally allowed for Year 8?
(A) single
(B) married filing separately
(C) head of household
(D) qualifying widow with dependent child
. Shari is 22 years old, is a full-time student, and earned $6,000 in Year 10.
Which of the following is CORRECT?
I. Shari cannot earn more than the exemption amount if claimed as a
dependent on her parents’ tax return in Year 10.
II. Shari must claim herself as a dependent if her parents furnish less
than 50% of her support for Year 10.
(A) lonly
(B) IL only
(C) both I and II
(D) neither I nor II
Taxation of Individuals Discussion Questions
. Ben and Freeda, both age 62, fled’a joint return for Year 7. They provided
all the support for their daughter Susan, who is 19, legally blind, mostly
deaf, and has no income. Their son, Harold, age 21 and a full-time university student, had $6,200 in income and provided 40% of his own support
during Year 7. Ben and Freeda can claim how DAR exemptions on their
Year 7 joint tax return?
(A) 2
(B03 (C) 4 (Dy 5
. Walter is 86 years old but still files an income tax return because he works
part-time at a nearby amusement park. Which of the following is TRUE?
(A) Because of his age, Walter receives an additional amount if he claims
itemized deductions.
(B) Because of his age, Walter receives an additional amount of personal
exemptions.
(C) Because of his age, the first $6,200 of Walter’s salary is nontaxable.
(D) Because of his age, Walter receives an additional amount for his standard deduction.
Taxation of Individuals << 3
8. Erin and Mars are married cash-basis taxpayers. The couple had interest
income as follows:
$500 interest on federal income tax refund
$600 interest on state income tax refund
$800 interest on US Treasury (i.e., federal government) obligations
$300 interest on Puerto Rico government obligations
$700 interest on state government obligations
What amount of interest income is taxable on the couple’s joint income
tax return?
(A) $500 (B) $1,100 (C) $1,900 (D) $2,900
9. Griffin received the following interest payments during the current year:
Interest of $500 on a refund of federal income tax for last year
Interest of $400 on an award for personal injuries sustained in a car
accident three years ago
Interest of $1,600 on municipal bonds
Interest of $1,100 on US savings bonds (Series HH)
What amount, if any, should be reported as interest income on Griffin’s
current year tax return?
(A) $3,600 (B) $2,000
(C) $900
(D) $0
10. Which of the following is a condition required for accumulated interest on
Series EE US savings bonds to be exempt from tax?
I. The bonds must have been purchased by the taxpayer or taxpayer’s
spouse and put in the name of a dependent child.
II. Redemption proceeds from the bonds are used to fix up the taxpayer’s
home.
(A) Ionly
(B) Il only
(C) both I and I
(D) neither I nor II
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