CHAPTERc1
THEcINDIVIDUALcINCOMEcTAXcRETURN
h earcofcspouse’scdeathc(LOc1.5)
Groupc1c–cMultiplecChoicecQuestions
o
1. Dc c Thecincomectaxcincludescelementscofcsocial l
c andceconomiccpolicyc(LOc1.1) d
c
2. C (
Thecincomectaxcwascauthorizedcbyct L
hec16thcAmendmentcinc1913c(LOc1.1) O
c
3. C Thec1040Acandc1040- 1
EZcnoclongercexistcandcthec1120ciscforccorpor .
ationsc(LOc1.2) 5
4. Dc PartnershipscusecFormc1065ctocreportcin )
comectaxcinformation.cAcpartnercwillcre 19. D
portctheircsharecofcincomecfromcacpart- c
cnershipconcacForm1040 c(LOc1.2) T
5. Dc Capitalcgainscandclossescarecreportedcd a
irectlyconcthecfacecofcthecFormc1040c(f x
romcSchedulecD)c(LOc1.2) p
a
6. Dc Acpartnershipciscnotcgenerallycactax- y
payingcentityc(LOc1.2) e
7. C r
StudentcloancinterestciscacforcAGIcded c
uction.cThecothercresponsescarecallcitemizedc( m
fromcAGI)cdeductionsc(LOc1.3) a
y
8. B c
ThecdeductioncforcIRAccontributi f
onsciscacforcAGIcdeductionc(LOc1.3) i
9. Dc $98,000c– l
c$13,000c(standardcdeductioncisclesscthanci
e
c
temizedcdeductions)c(LOc1.3) m
10. Dc ForcAGIcadjustmentscarecdeductedctocgetct a
ocAGIc(LOc1.3) r
11. B r
i
Theclargercofcthectwocmaycbecd
e
eductedc(LOc1.3)
d
12. A Ancexclusioncreducescgrosscincomec(LOc1.3) c
f
13. B
i
Filingcthresholdscgenerallycarecthec
l
samecascthecstandardcdeductioncamountc(L
i
Oc1.4)
n
14. Dc Ben’scincomecwouldcneedctocexceedcthecs g
tandardcdeductionctocrequirecfilingcactaxcr c
eturnc(LOc1.4) j
o
15. Dc c $25,900c+c$1,400c(LOc1.4)
i
16. C Singlecdependentcoverc65candcblindcthresh- n
coldcisc$4,500cforcunearnedcincomec(LOc1.4)
t
17. Cc Joancqualifiescasceithercsinglecorcheadcofch l
ousehold;chowever,cheadcofchouseholdcis y
c
cmorecadvantageousc(LOc1.5)
i
18. Dc AlthoughcDorothycdoescnotclivecwithcGlen n
da,csincecDorothyciscacparentcthatcGlendacs c
upports,cGlendacmaycfilecascheadcofchouse y
, EithercMargaretcorchercsisterc(butcnotcboth)c
maycclaimcthecmothercascacdependentcunderc
20. C acmultiplecsupportcagreementc(LOc1.6)
22. Dc Thecdaughtercfailscthecagectestctocbecacq
S ualifyingcchildcandcshecfailscthecgrosscin
u comectestc($4,400cinc2022)ctocbecacqual
r ifyingcrelativec(LOc1.6)
23. vDc Thecchildctaxccreditcinc2022cisc$2,000c(
i LOc1.6)
v
24. iB Thecchildctaxccreditcforcthec13-year-
n oldcchildcisc$2,000.cThecmothercdoescnotcmee
g tcthecsupportctestcandccannotcbecclaimedc(LOc
c 1.6)
s
25. B
p
Mustcbecagec16corcundercforcchildcta
o
xccreditc(LOc1.6)
u
26. sA
e Headcofchouseholdcstandardcdeducti
c oncpluscadditionalcstandardcdeductioncforcag
i ec65c($19,400c+c$1,750)c(LOc1.7)
s
27. cBc Taxpayerscagec65corcoldercareceligiblecf
p orcancadditionalcstandardcdeductionca
r mountc(LOc1.7)
28. eB
f Taxpayerscthatcarecblindcareceligi
e blecforcancadditionalcstandardcdeductionca
r mountc(LOc1.7)
r
29. Dc c Earnedcincomecplusc$400c(LOc1.7)
e
30. dE
c
Standardcdeductioncmaycnotcexceed
t ctypicalcamountc(LOc1.7)
o
31. cDc Businesscinventoryciscnotcconsideredcacc
h apitalcassetc(LOc1.8)
32. eAc Gaincofc$15,000c($25,000camountcrealizedcl
a essc$10,000cadjustedcbasis)chascbeencheldcf
d orcmorecthanc12cmonthscandcisclong-
c
o termc(LOc1.8)
33. fcCc $10,000c=c$240,000c–c($270,000c–
h c$40,000)c(LOc1.8)
34. oAc $43,000c–
u c$3,000.cNetccapitalclossescofcupctoc$3,000c
s maycbecdeductedcfromcordinarycincomecfo
e rcindividualctaxpayersc(LOc1.8)
35. hCc c Linec7cisccapitalcgaincorc(loss)c(LOc1.9)
36. oBc Preparerscmustcgetcacsignedcauthorizationctoc
l e-filecfromcthectaxpayer.c(LOc1.10)
d
37. cBc Aboutc90%cofcreturnscarecfiledcelectronicallyc(
( LOc1.10)
1-1 L
O
c
1
.
5
)
21. E
,
, 1-2 Chapterc1c–cThecIndividualcIncomecTaxcReturn
Groupc2c–cProblems
1. a. Raisingcrevenuectocoperatecthecgovernment.
b. Furtheringceconomiccgoalscsuchcascreducingcunemployment.
c. Furtheringcsocialcgoalscsuchcascencouragingccontributionsctoccharities.c (LOc1.1)
2. a. Formc1040
b. SchedulecB
c. SchedulecD
d. SchedulecA
e. Schedulec2
f. SchedulecE
g. Schedulec3
h. SchedulecC
i. Schedulec1c (LOc1.2)
3. a. $36,300c=c$42,000c+c$300c–c$6,000.
b. $25,900,cthecgreatercofcitemizedcdeductionscorcthecstandardcdeductioncofc$25,900.
c. $10,400c=c$36,300c–c$25,900.c (LOc1.3)
4. a. $25,000.
b. $12,950,cthecgreatercofctotalcitemizedcdeductionscorcthecstandardcdeductioncamount.
c. $12,050c=c$25,000c–c$12,950.c (LOc1.3)
5. a. $53,800c=c$54,000c+c$2,800c–c$3,000c($7,000ccapitalclossclimitedctoc$3,000).
b. $12,950
c. $40,850c=c$53,800c–c$12,950.c (LOc1.3candc1.8)
6. a. $47,500c=c$48,000c+c$2,500c–c$3,000.
b. $25,900,cthecgreatercofcitemizedcdeductionscorcthecstandardcdeductioncofc$25,900.
c. $21,600c=c$47,500c–c$25,900.
d. $2,184c(TaxcTable)c (LOc1.3,c1.5,candc1.7)
7. Adjustedcgrosscincome
$18,000
cLess:c c Itemizedcdeductions c –2,400
Taxablecincome $15,600
Marco’sctaxcliabilitycfromcthecTaxcTablecisc$1,670.cNote:cbecausectheycarecmarriedcandcfilingcseparatelycandcMar-
cco’scspousecTatianacitemizeschercdeductions,cMarcocmustcalsocitemizechiscdeductions,cevencthoughcthecitemizedcd
eductionsctotalcisclesscthancthecstandardcdeductionchecwouldcbecotherwisecentitledcto.c (LOc1.3,c1.5,candc1.7)
8. Adjustedcgrosscincomec($13,200c+c$1,450)
$c14,650cLess:
Standardcdeduction c–12,950
Taxablecincome $c 1,700
(LOc1.3,c1.5,candc1.7)
(Note:cSeecChapterc6cforcthectaxccreditccomputationcforcdependentccollegecstudentscundercagec24.)
9. a. $34,050c=c$47,000c–c$12,950.
b. Taxctables.c Taxpayerscwithcincomecupctoc$100,000cmustcusecthectaxctables.
c. $3,884.c (LOc1.3,c1.5,candc1.7)
10. a. $66,000c=c$50,000c+c$8,000c+c$5,000c+c$3,000.
b. $63,500c=c$66,000c–c$2,500.
c. $27,000,cthecgreatercofcitemizedcdeductionscorcthecstandardcdeductioncofc$25,900.
d. $36,500c=c$63,500c–c$27,000.
e. $3,972c (LOc1.3,c1.5,candc1.7)
THEcINDIVIDUALcINCOMEcTAXcRETURN
h earcofcspouse’scdeathc(LOc1.5)
Groupc1c–cMultiplecChoicecQuestions
o
1. Dc c Thecincomectaxcincludescelementscofcsocial l
c andceconomiccpolicyc(LOc1.1) d
c
2. C (
Thecincomectaxcwascauthorizedcbyct L
hec16thcAmendmentcinc1913c(LOc1.1) O
c
3. C Thec1040Acandc1040- 1
EZcnoclongercexistcandcthec1120ciscforccorpor .
ationsc(LOc1.2) 5
4. Dc PartnershipscusecFormc1065ctocreportcin )
comectaxcinformation.cAcpartnercwillcre 19. D
portctheircsharecofcincomecfromcacpart- c
cnershipconcacForm1040 c(LOc1.2) T
5. Dc Capitalcgainscandclossescarecreportedcd a
irectlyconcthecfacecofcthecFormc1040c(f x
romcSchedulecD)c(LOc1.2) p
a
6. Dc Acpartnershipciscnotcgenerallycactax- y
payingcentityc(LOc1.2) e
7. C r
StudentcloancinterestciscacforcAGIcded c
uction.cThecothercresponsescarecallcitemizedc( m
fromcAGI)cdeductionsc(LOc1.3) a
y
8. B c
ThecdeductioncforcIRAccontributi f
onsciscacforcAGIcdeductionc(LOc1.3) i
9. Dc $98,000c– l
c$13,000c(standardcdeductioncisclesscthanci
e
c
temizedcdeductions)c(LOc1.3) m
10. Dc ForcAGIcadjustmentscarecdeductedctocgetct a
ocAGIc(LOc1.3) r
11. B r
i
Theclargercofcthectwocmaycbecd
e
eductedc(LOc1.3)
d
12. A Ancexclusioncreducescgrosscincomec(LOc1.3) c
f
13. B
i
Filingcthresholdscgenerallycarecthec
l
samecascthecstandardcdeductioncamountc(L
i
Oc1.4)
n
14. Dc Ben’scincomecwouldcneedctocexceedcthecs g
tandardcdeductionctocrequirecfilingcactaxcr c
eturnc(LOc1.4) j
o
15. Dc c $25,900c+c$1,400c(LOc1.4)
i
16. C Singlecdependentcoverc65candcblindcthresh- n
coldcisc$4,500cforcunearnedcincomec(LOc1.4)
t
17. Cc Joancqualifiescasceithercsinglecorcheadcofch l
ousehold;chowever,cheadcofchouseholdcis y
c
cmorecadvantageousc(LOc1.5)
i
18. Dc AlthoughcDorothycdoescnotclivecwithcGlen n
da,csincecDorothyciscacparentcthatcGlendacs c
upports,cGlendacmaycfilecascheadcofchouse y
, EithercMargaretcorchercsisterc(butcnotcboth)c
maycclaimcthecmothercascacdependentcunderc
20. C acmultiplecsupportcagreementc(LOc1.6)
22. Dc Thecdaughtercfailscthecagectestctocbecacq
S ualifyingcchildcandcshecfailscthecgrosscin
u comectestc($4,400cinc2022)ctocbecacqual
r ifyingcrelativec(LOc1.6)
23. vDc Thecchildctaxccreditcinc2022cisc$2,000c(
i LOc1.6)
v
24. iB Thecchildctaxccreditcforcthec13-year-
n oldcchildcisc$2,000.cThecmothercdoescnotcmee
g tcthecsupportctestcandccannotcbecclaimedc(LOc
c 1.6)
s
25. B
p
Mustcbecagec16corcundercforcchildcta
o
xccreditc(LOc1.6)
u
26. sA
e Headcofchouseholdcstandardcdeducti
c oncpluscadditionalcstandardcdeductioncforcag
i ec65c($19,400c+c$1,750)c(LOc1.7)
s
27. cBc Taxpayerscagec65corcoldercareceligiblecf
p orcancadditionalcstandardcdeductionca
r mountc(LOc1.7)
28. eB
f Taxpayerscthatcarecblindcareceligi
e blecforcancadditionalcstandardcdeductionca
r mountc(LOc1.7)
r
29. Dc c Earnedcincomecplusc$400c(LOc1.7)
e
30. dE
c
Standardcdeductioncmaycnotcexceed
t ctypicalcamountc(LOc1.7)
o
31. cDc Businesscinventoryciscnotcconsideredcacc
h apitalcassetc(LOc1.8)
32. eAc Gaincofc$15,000c($25,000camountcrealizedcl
a essc$10,000cadjustedcbasis)chascbeencheldcf
d orcmorecthanc12cmonthscandcisclong-
c
o termc(LOc1.8)
33. fcCc $10,000c=c$240,000c–c($270,000c–
h c$40,000)c(LOc1.8)
34. oAc $43,000c–
u c$3,000.cNetccapitalclossescofcupctoc$3,000c
s maycbecdeductedcfromcordinarycincomecfo
e rcindividualctaxpayersc(LOc1.8)
35. hCc c Linec7cisccapitalcgaincorc(loss)c(LOc1.9)
36. oBc Preparerscmustcgetcacsignedcauthorizationctoc
l e-filecfromcthectaxpayer.c(LOc1.10)
d
37. cBc Aboutc90%cofcreturnscarecfiledcelectronicallyc(
( LOc1.10)
1-1 L
O
c
1
.
5
)
21. E
,
, 1-2 Chapterc1c–cThecIndividualcIncomecTaxcReturn
Groupc2c–cProblems
1. a. Raisingcrevenuectocoperatecthecgovernment.
b. Furtheringceconomiccgoalscsuchcascreducingcunemployment.
c. Furtheringcsocialcgoalscsuchcascencouragingccontributionsctoccharities.c (LOc1.1)
2. a. Formc1040
b. SchedulecB
c. SchedulecD
d. SchedulecA
e. Schedulec2
f. SchedulecE
g. Schedulec3
h. SchedulecC
i. Schedulec1c (LOc1.2)
3. a. $36,300c=c$42,000c+c$300c–c$6,000.
b. $25,900,cthecgreatercofcitemizedcdeductionscorcthecstandardcdeductioncofc$25,900.
c. $10,400c=c$36,300c–c$25,900.c (LOc1.3)
4. a. $25,000.
b. $12,950,cthecgreatercofctotalcitemizedcdeductionscorcthecstandardcdeductioncamount.
c. $12,050c=c$25,000c–c$12,950.c (LOc1.3)
5. a. $53,800c=c$54,000c+c$2,800c–c$3,000c($7,000ccapitalclossclimitedctoc$3,000).
b. $12,950
c. $40,850c=c$53,800c–c$12,950.c (LOc1.3candc1.8)
6. a. $47,500c=c$48,000c+c$2,500c–c$3,000.
b. $25,900,cthecgreatercofcitemizedcdeductionscorcthecstandardcdeductioncofc$25,900.
c. $21,600c=c$47,500c–c$25,900.
d. $2,184c(TaxcTable)c (LOc1.3,c1.5,candc1.7)
7. Adjustedcgrosscincome
$18,000
cLess:c c Itemizedcdeductions c –2,400
Taxablecincome $15,600
Marco’sctaxcliabilitycfromcthecTaxcTablecisc$1,670.cNote:cbecausectheycarecmarriedcandcfilingcseparatelycandcMar-
cco’scspousecTatianacitemizeschercdeductions,cMarcocmustcalsocitemizechiscdeductions,cevencthoughcthecitemizedcd
eductionsctotalcisclesscthancthecstandardcdeductionchecwouldcbecotherwisecentitledcto.c (LOc1.3,c1.5,candc1.7)
8. Adjustedcgrosscincomec($13,200c+c$1,450)
$c14,650cLess:
Standardcdeduction c–12,950
Taxablecincome $c 1,700
(LOc1.3,c1.5,candc1.7)
(Note:cSeecChapterc6cforcthectaxccreditccomputationcforcdependentccollegecstudentscundercagec24.)
9. a. $34,050c=c$47,000c–c$12,950.
b. Taxctables.c Taxpayerscwithcincomecupctoc$100,000cmustcusecthectaxctables.
c. $3,884.c (LOc1.3,c1.5,candc1.7)
10. a. $66,000c=c$50,000c+c$8,000c+c$5,000c+c$3,000.
b. $63,500c=c$66,000c–c$2,500.
c. $27,000,cthecgreatercofcitemizedcdeductionscorcthecstandardcdeductioncofc$25,900.
d. $36,500c=c$63,500c–c$27,000.
e. $3,972c (LOc1.3,c1.5,candc1.7)
