Chapter 1: Fundamentals of Income Taxation|2023 LATEST UPDATE|GUARANTEED SUCCESS

Which of the following is NOT a requirement that must be satisfied in order for a legally married taxpayer to qualify as an abandoned spouse and use the head-of-household filing status? 1. The taxpayer must file a separate tax return from the spouse. 2. The taxpayer must furnish over one-half of the cost of maintaining the household. 3. The spouse must not be a member of the household during the last 6 months of the tax year. 4. The taxpayer must be legally separated from the spouse. The taxpayer must be legally separated from the spouse. Trevor is 62 years old, single, and a dependent of his daughter. During the current year, Trevor received $3,500 interest on money in a bank account and $2,300 from a part-time job. What is Trevor's taxable income? $3,150 Because Trevor is a dependent of another, his standard deduction is limited to the greater of $1,100 and his earned income + $350. Therefore Trevors standard deduction is $2,650. $5,800 - $2,650 = $3,150 taxable income Alfred, aged 21, is a full-time student at a university and is a dependent of his parents. This year, he earned $2,000 from a part-time job and had $950 interest from a savings account. He had a total of $200 in itemized deductions in the current year. What is Alfred's taxable income this year? $600 Alfred's bank account and salary combine to give him an income of $2,950 before the standard deduction. Because Alfred is a dependent of another, his standard deduction is limited to the greater of $1,100 and his earned income + $350. Therefore Gus deduction is $2,350. $2,950 - $2,350 = $600 taxable income Peyton is single and has two dependent children. Financial records show the following items in the current year: A $12,000 gift from a friend $1,200 in dividends received on stock A $1,000 prize won in the state lottery A $35,000 salary from his employer $6,000 in child support received from an ex-spouse $12,000 in alimony received from an ex-spouse (2016 divorce) How much is Peyton's adjusted gross income (AGI) for the current year? $49,200 Only Peyton's dividends, prize money, salary, and alimony are included in the AGI. $1,200 + $1,000 + $35,000 + $12,000= $49,200 AGI Quinn and Robin McBride have several children living under their care. Which of the following children does not meet the relationship test for the purpose of Quinn and Robin claiming a qualified child? 1. Bo, Robin's 8-year-old son from a prior marriage 2. Kristina, Quinn's 10-year-old cousin 3. Carl, a 5-year-old foster child placed with Quinn and Robin by a state agency 4. Harley, Robin's 12-year-old niece Kristina Because Kristina is from the same generation as Quinn (even though she's much younger), she does not meet the relationship test. A qualifying child must be from a lower generation than the taxpayer. All of the other children qualify. Which of the following taxpayers can use the standard deduction? 1. Jorge, who files a separate return from his wife, Esther. Esther itemizes deductions on her return. 2. Claude, who is a nonresident alien. 3. Christian, who files a tax return for less than 12 months because he changed his annual accounting period. 4. Marguerite, who owns a personal residence. Margie Only Margie describes a taxpayer who is permitted to use a standard deduction. All other taxpayers are required to itemize their deductions