TEST BANK for Income Tax Fundamentals 2023
41st Edition by Gerald E. Whittenburg,
Steven Gill.
,Chapter 1: The Individual Income Tax Return
• A corporation is a reporting entity but not a tax-paying
entity. True False
• Partnership capital gains and losses are allocated separately to each of the partners. True
False
• Married taxpayers may double their standard deduction amount by filing separate
returns.
True False
• An item is not included in gross income unless the tax law specifies that the item is
subject to taxation.
True False
• For taxpayers who do not itemize deductions, the standard deduction amount is
subtracted from the taxpayer's adjusted gross income.
True False
• A taxpayer with self-employment income of $600 must file a tax return.
True False
• A dependent child with earned income in excess of the available standard deduction
amount must file a tax return.
True False
• A single taxpayer, who is not blind and who is under age 65, with income of $8,750
must file a tax return.
• If a taxpayer is due a refund, it will be mailed to the taxpayer regardless of whether he or
she files a tax return.
True False
, • Taxpayers with self-employment income of $400 or more must file a tax return.
True False
• If your spouse dies during the tax year and you do not remarry, you must file as
single for the year of death.
True False
• Taxpayers who do not qualify for married, head of household, or qualifying widow or
widower filing status must file as single.
True False
• If an unmarried taxpayer paid more than half the cost of keeping a home which is the
principal place of residence of a nephew, who is not her dependent, she may use the head of household
filing status.
True False
• The maximum official individual income tax rate for 2012 is 35 percent.
True False
• All taxpayers may use the tax rate schedule to determine their tax liability.
True False
• The head of household tax rates are higher than the rates for a single taxpayer. True
False
• Most states are community property states.
• If taxpayers are married and living together at the end of the year, they must file a joint
tax return.
True False
• A taxpayer who maintains a household with an unmarried child may qualify to file as
head of household even if the child is not the taxpayer's dependent.
True False
, • A married person with a dependent child may choose to file as head of household if it
reduces his or her tax liability.
True False
• A taxpayer who is living alone and is legally separated from his or her spouse under a
separate maintenance decree at year-end should file as single.
True False
• An individual, age 22, enrolled on a full-time basis at a trade school, is considered a
student for purposes of determining whether a dependency exemption is permitted. True False
• A dependency exemption may be claimed by the supporting taxpayer in the year of
death of a dependent.
True False
• For 2012, personal and dependency exemptions are $3,800 each.
True False
• Scholarships received by a student may be excluded for purposes of the support test for
determining the availability of the dependency exemption.
True False
• The two types of exemptions are the personal exemption and the dependency
exemption.
True False
• A child for whom a dependency exemption is claimed on the parents' tax return may also
claim a personal exemption on his or her own tax return.
True False
• If a taxpayer's adjusted gross income exceeds certain threshold amounts, he or she may
be required to reduce the amount of the otherwise allowable deductions for itemized deductions and
personal and dependency exemptions in 2012.
True False
41st Edition by Gerald E. Whittenburg,
Steven Gill.
,Chapter 1: The Individual Income Tax Return
• A corporation is a reporting entity but not a tax-paying
entity. True False
• Partnership capital gains and losses are allocated separately to each of the partners. True
False
• Married taxpayers may double their standard deduction amount by filing separate
returns.
True False
• An item is not included in gross income unless the tax law specifies that the item is
subject to taxation.
True False
• For taxpayers who do not itemize deductions, the standard deduction amount is
subtracted from the taxpayer's adjusted gross income.
True False
• A taxpayer with self-employment income of $600 must file a tax return.
True False
• A dependent child with earned income in excess of the available standard deduction
amount must file a tax return.
True False
• A single taxpayer, who is not blind and who is under age 65, with income of $8,750
must file a tax return.
• If a taxpayer is due a refund, it will be mailed to the taxpayer regardless of whether he or
she files a tax return.
True False
, • Taxpayers with self-employment income of $400 or more must file a tax return.
True False
• If your spouse dies during the tax year and you do not remarry, you must file as
single for the year of death.
True False
• Taxpayers who do not qualify for married, head of household, or qualifying widow or
widower filing status must file as single.
True False
• If an unmarried taxpayer paid more than half the cost of keeping a home which is the
principal place of residence of a nephew, who is not her dependent, she may use the head of household
filing status.
True False
• The maximum official individual income tax rate for 2012 is 35 percent.
True False
• All taxpayers may use the tax rate schedule to determine their tax liability.
True False
• The head of household tax rates are higher than the rates for a single taxpayer. True
False
• Most states are community property states.
• If taxpayers are married and living together at the end of the year, they must file a joint
tax return.
True False
• A taxpayer who maintains a household with an unmarried child may qualify to file as
head of household even if the child is not the taxpayer's dependent.
True False
, • A married person with a dependent child may choose to file as head of household if it
reduces his or her tax liability.
True False
• A taxpayer who is living alone and is legally separated from his or her spouse under a
separate maintenance decree at year-end should file as single.
True False
• An individual, age 22, enrolled on a full-time basis at a trade school, is considered a
student for purposes of determining whether a dependency exemption is permitted. True False
• A dependency exemption may be claimed by the supporting taxpayer in the year of
death of a dependent.
True False
• For 2012, personal and dependency exemptions are $3,800 each.
True False
• Scholarships received by a student may be excluded for purposes of the support test for
determining the availability of the dependency exemption.
True False
• The two types of exemptions are the personal exemption and the dependency
exemption.
True False
• A child for whom a dependency exemption is claimed on the parents' tax return may also
claim a personal exemption on his or her own tax return.
True False
• If a taxpayer's adjusted gross income exceeds certain threshold amounts, he or she may
be required to reduce the amount of the otherwise allowable deductions for itemized deductions and
personal and dependency exemptions in 2012.
True False
