Test Bank for Income Tax Fundamentals 2023, 41e Gerald Whittenburg, Steven Gill
CH 01 The Individual Income Tax Return
Indicate whether the statement is true or false.
1. The U.S. federal tax law's sole purpose is to raise revenue.
a. True
b. False
2. A corporation is a reporting entity but not a tax-paying entity.
a. True
b. False
3. Partnership capital gains and losses are allocated separately to each of the partners.
a. True
b. False
4. Married taxpayers may double their standard deduction amount by filing separate returns.
a. True
b. False
5. An item is included in gross income unless the tax law specifies that the item is subject to exclusion.
a. True
b. False
6. For taxpayers who do not itemize deductions, the standard deduction amount is subtracted from the taxpayer's adjusted
gross income.
a. True
b. False
7. A taxpayer with self-employment income of $600 must file a tax return.
a. True
b. False
8. A dependent child with earned income in excess of the available standard deduction amount must file a tax return.
a. True
b. False
9. A single taxpayer, who is not a dependent on another’s return, not blind, and under age 65, with income of $11,800
must file a tax return.
a. True
b. False
10. If a taxpayer is due a refund, it will be mailed to the taxpayer regardless of whether a tax return is filed.
a. True
b. False
11. Taxpayers with self-employment income of $400 or more must file a tax return.
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, a. True
b. False
12. If your spouse dies during the tax year and you do not remarry, you must file as single for the year of death.
a. True
b. False
13. Taxpayers who do not qualify for married, head of household, or surviving spouse filing status must file as single.
a. True
b. False
14. 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 their dependent, they may use the head of household filing status.
a. True
b. False
15. The maximum official individual income tax rate for 2022 is 39.6 percent, not including the Medicare surtax on net
investment income.
a. True
b. False
16. All taxpayers may use the tax rate schedule to determine their tax liability.
a. True
b. False
17. The head of household tax rates are higher than the rates for a single taxpayer.
a. True
b. False
18. Most states are community property states.
a. True
b. False
19. If taxpayers are married and living together at the end of the year, they must file a joint tax return.
a. True
b. False
20. 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.
a. True
b. False
21. A married person with a dependent child may choose to file as head of household if it reduces the taxpayer's tax
liability.
a. True
b. False
22. Taxpayers who live alone, are legally separated from their spouses under a separate maintenance decree at year-end,
and have no dependents should file as single.
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, a. True
b. False
23. Malik, age 22, is enrolled in college on a full-time basis. His parents provide all of his support. Malik may be claimed
as a dependent by his parents.
a. True
b. False
24. A dependent that dies during the tax year may still qualify as a dependent.
a. True
b. False
25. For 2022, the deductions for personal and dependency exemptions are $4,300 each.
a. True
b. False
26. Scholarships received by a student may be excluded for purposes of the support test for determining the availability of
the dependency exemption.
a. True
b. False
27. The two types of dependents are qualifying child or qualifying relative.
a. True
b. False
28. An 18-year-old full-time student who is claimed on the parents' tax return as a dependent is eligible for the child tax
credit.
a. True
b. False
29. Most taxpayers may deduct the standard deduction amount or the amount of their itemized deductions, whichever is
higher.
a. True
b. False
30. An individual taxpayer with a net capital loss may deduct up to $3,000 per year against ordinary income.
a. True
b. False
31. Taxpayers can download tax forms from the IRS Internet site.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
32. Which of the following is a goal of the tax law?
a. Encouraging certain social goals such as contributions to charity
b. Supporting certain economic goals such as increasing unemployment
c. Encouraging smaller families
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, d. Promoting good will with other countries
33. Which one of the following provisions was passed by Congress to meet a social goal of the tax law?
a. The deduction for job hunting expenses
b. The child and dependent care credit
c. The moving expense deduction for adjusted gross income
d. The deduction for soil and water conservation costs available to farmers
34. Which of the following is an economic goal of the tax law?
a. Ensuring that all persons pay the same amount of tax
b. Reducing unemployment
c. Lowering the cost of adoption
d. Encouraging charitable contributions
35. In 2022, Wesley has a fairly simple tax situation with moderate wage income and a modest amount of interest income.
Wesley, age 45, wishes to use the easiest possible tax form. He may file which of the following?
a. Form 1040-EZ
b. Form 1040-SR
c. Form 1040
d. Form 1065
36. Which of the following forms may be filed by individual taxpayers?
a. Form 1040
b. Form 1041
c. Form 1065
d. Form 1120
37. Which of the following is true of partnerships?
a. They are not taxable entities.
b. They are taxed in the same manner as individuals.
c. They file tax returns on Form 1120.
d. They file tax returns on Form 1041.
38. Which of the following is correct regarding reporting and taxable entities?
a. An individual is a reporting entity but not a taxable entity.
b. A partnership is a taxable entity and a reporting entity.
c. A corporation is a reporting entity but not a taxable entity.
d. A partnership is a reporting entity but not a taxable entity.
39. In 2022, Schedule 1 of Form 1040 is used to report what?
a. Income from wages
b. Capital gains and losses
c. Withholding on wages
d. Unemployment compensation
40. Partnership income is reported on _____.
a. Form 1040PTR
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CH 01 The Individual Income Tax Return
Indicate whether the statement is true or false.
1. The U.S. federal tax law's sole purpose is to raise revenue.
a. True
b. False
2. A corporation is a reporting entity but not a tax-paying entity.
a. True
b. False
3. Partnership capital gains and losses are allocated separately to each of the partners.
a. True
b. False
4. Married taxpayers may double their standard deduction amount by filing separate returns.
a. True
b. False
5. An item is included in gross income unless the tax law specifies that the item is subject to exclusion.
a. True
b. False
6. For taxpayers who do not itemize deductions, the standard deduction amount is subtracted from the taxpayer's adjusted
gross income.
a. True
b. False
7. A taxpayer with self-employment income of $600 must file a tax return.
a. True
b. False
8. A dependent child with earned income in excess of the available standard deduction amount must file a tax return.
a. True
b. False
9. A single taxpayer, who is not a dependent on another’s return, not blind, and under age 65, with income of $11,800
must file a tax return.
a. True
b. False
10. If a taxpayer is due a refund, it will be mailed to the taxpayer regardless of whether a tax return is filed.
a. True
b. False
11. Taxpayers with self-employment income of $400 or more must file a tax return.
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, a. True
b. False
12. If your spouse dies during the tax year and you do not remarry, you must file as single for the year of death.
a. True
b. False
13. Taxpayers who do not qualify for married, head of household, or surviving spouse filing status must file as single.
a. True
b. False
14. 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 their dependent, they may use the head of household filing status.
a. True
b. False
15. The maximum official individual income tax rate for 2022 is 39.6 percent, not including the Medicare surtax on net
investment income.
a. True
b. False
16. All taxpayers may use the tax rate schedule to determine their tax liability.
a. True
b. False
17. The head of household tax rates are higher than the rates for a single taxpayer.
a. True
b. False
18. Most states are community property states.
a. True
b. False
19. If taxpayers are married and living together at the end of the year, they must file a joint tax return.
a. True
b. False
20. 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.
a. True
b. False
21. A married person with a dependent child may choose to file as head of household if it reduces the taxpayer's tax
liability.
a. True
b. False
22. Taxpayers who live alone, are legally separated from their spouses under a separate maintenance decree at year-end,
and have no dependents should file as single.
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, a. True
b. False
23. Malik, age 22, is enrolled in college on a full-time basis. His parents provide all of his support. Malik may be claimed
as a dependent by his parents.
a. True
b. False
24. A dependent that dies during the tax year may still qualify as a dependent.
a. True
b. False
25. For 2022, the deductions for personal and dependency exemptions are $4,300 each.
a. True
b. False
26. Scholarships received by a student may be excluded for purposes of the support test for determining the availability of
the dependency exemption.
a. True
b. False
27. The two types of dependents are qualifying child or qualifying relative.
a. True
b. False
28. An 18-year-old full-time student who is claimed on the parents' tax return as a dependent is eligible for the child tax
credit.
a. True
b. False
29. Most taxpayers may deduct the standard deduction amount or the amount of their itemized deductions, whichever is
higher.
a. True
b. False
30. An individual taxpayer with a net capital loss may deduct up to $3,000 per year against ordinary income.
a. True
b. False
31. Taxpayers can download tax forms from the IRS Internet site.
a. True
b. False
Indicate the answer choice that best completes the statement or answers the question.
32. Which of the following is a goal of the tax law?
a. Encouraging certain social goals such as contributions to charity
b. Supporting certain economic goals such as increasing unemployment
c. Encouraging smaller families
Powered by Cognero Page 3
, d. Promoting good will with other countries
33. Which one of the following provisions was passed by Congress to meet a social goal of the tax law?
a. The deduction for job hunting expenses
b. The child and dependent care credit
c. The moving expense deduction for adjusted gross income
d. The deduction for soil and water conservation costs available to farmers
34. Which of the following is an economic goal of the tax law?
a. Ensuring that all persons pay the same amount of tax
b. Reducing unemployment
c. Lowering the cost of adoption
d. Encouraging charitable contributions
35. In 2022, Wesley has a fairly simple tax situation with moderate wage income and a modest amount of interest income.
Wesley, age 45, wishes to use the easiest possible tax form. He may file which of the following?
a. Form 1040-EZ
b. Form 1040-SR
c. Form 1040
d. Form 1065
36. Which of the following forms may be filed by individual taxpayers?
a. Form 1040
b. Form 1041
c. Form 1065
d. Form 1120
37. Which of the following is true of partnerships?
a. They are not taxable entities.
b. They are taxed in the same manner as individuals.
c. They file tax returns on Form 1120.
d. They file tax returns on Form 1041.
38. Which of the following is correct regarding reporting and taxable entities?
a. An individual is a reporting entity but not a taxable entity.
b. A partnership is a taxable entity and a reporting entity.
c. A corporation is a reporting entity but not a taxable entity.
d. A partnership is a reporting entity but not a taxable entity.
39. In 2022, Schedule 1 of Form 1040 is used to report what?
a. Income from wages
b. Capital gains and losses
c. Withholding on wages
d. Unemployment compensation
40. Partnership income is reported on _____.
a. Form 1040PTR
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