Income Tax Final| 100 questions| with complete solutions

Arnold is married to Sybil, who abandoned him in 2016. He has not seen or communicated with her since April of that year. He maintains a household in which their son, Evans, lives. Evans is age 25, does not attend school, and earns over $6,000 each year. For tax year 2018, Arnold's filing status is: correct answer: Married, filing separately. When a business is operated as an S corporation, a disadvantage is that the shareholder must pay the tax on his or her share of the S corporation's income even though the S corporation did not distribute the income to the shareholder. correct answer: True Kim, a resident of Minnesota, supports his parents who are residents of Canada but citizens of Korea. Kim can claim his parents as dependents. correct answer: True If a taxpayer decides not to pay a tax deficiency, he or she must go to which court? correct answer: U.S. Tax Court The taxable portion of Social Security benefits may be affected by: correct answer: The individual's tax-exempt interest income. The purpose of the tax rules that apply to below-market loans between family members is to: correct answer: Prevent shifting of income among family members.