South-Western Federal Taxation Comprehensive, Chapter
2025) 3 3
South-Western
South-Western Federal
Federal Taxation
Taxation Comprehensive,
Comprehensive, Chapter
Chapter 3(updated
Study online at https://quizlet.com/_ds2e76
1. Abandoned enables a married taxpayer with a dependent child whose spouse did not live in
spouse provision the taxpayer's home during the last six months of the tax year to file as a head of
household rather than as married filing separately.
2. Child tax credit A tax credit based solely on the number of qualifying children under age 17. The
maximum credit available is $1,000 per child through 2017. A qualifying child
must be claimed as a dependent on a parent's tax return to qualify for the credit.
Taxpayers who qualify for the child tax credit may also qualify for a supplemental
credit. The supplemental credit is treated as a component of the earned income
credit and is therefore refundable. The credit is phased out for higher-income
taxpayers. § 24.
3. Collectibles A special type of capital asset, the gain from which is taxed at a maximum rate of
28 percent if the holding period is more than one year. Examples include art, rugs,
antiques, gems, metals, stamps, some coins and bullion, and alcoholic beverages
held for investment.
4. Dependency ex- The tax law provides an exemption for each individual taxpayer and an additional
emption exemption for the taxpayer's spouse if a joint return is filed. An individual may
also claim a dependency exemption for each dependent, provided certain tests
are met. The amount of the personal and dependency exemptions is $3,900 in
2013 ($3,800 in 2012). The exemption is subject to phaseout once adjusted gross
income exceeds certain statutory threshold amounts. This phaseout provision is
subject to partial phaseout beginning in 2006. Beginning in 2010, the phaseout
provision no longer applies. Under the sunset provision, the phaseout of personal
and dependency exemptions was scheduled to be reinstated in 2011. The Tax
Relief Act (TRA) of 2010 put off the reinstatement for two years (i.e., 2011 and
2012). For 2013, the American Taxpayer Relief Act of 2012 restored the phaseout
of personal and dependency exemptions.
5. Head of house- An unmarried individual who maintains a household for another and satisfies
hold certain conditions set forth in § 2(b). This status enables the taxpayer to use a
South-Western Federal Taxation Comprehensive, Chapter 3
1/4
2025) 3 3
South-Western
South-Western Federal
Federal Taxation
Taxation Comprehensive,
Comprehensive, Chapter
Chapter 3(updated
Study online at https://quizlet.com/_ds2e76
1. Abandoned enables a married taxpayer with a dependent child whose spouse did not live in
spouse provision the taxpayer's home during the last six months of the tax year to file as a head of
household rather than as married filing separately.
2. Child tax credit A tax credit based solely on the number of qualifying children under age 17. The
maximum credit available is $1,000 per child through 2017. A qualifying child
must be claimed as a dependent on a parent's tax return to qualify for the credit.
Taxpayers who qualify for the child tax credit may also qualify for a supplemental
credit. The supplemental credit is treated as a component of the earned income
credit and is therefore refundable. The credit is phased out for higher-income
taxpayers. § 24.
3. Collectibles A special type of capital asset, the gain from which is taxed at a maximum rate of
28 percent if the holding period is more than one year. Examples include art, rugs,
antiques, gems, metals, stamps, some coins and bullion, and alcoholic beverages
held for investment.
4. Dependency ex- The tax law provides an exemption for each individual taxpayer and an additional
emption exemption for the taxpayer's spouse if a joint return is filed. An individual may
also claim a dependency exemption for each dependent, provided certain tests
are met. The amount of the personal and dependency exemptions is $3,900 in
2013 ($3,800 in 2012). The exemption is subject to phaseout once adjusted gross
income exceeds certain statutory threshold amounts. This phaseout provision is
subject to partial phaseout beginning in 2006. Beginning in 2010, the phaseout
provision no longer applies. Under the sunset provision, the phaseout of personal
and dependency exemptions was scheduled to be reinstated in 2011. The Tax
Relief Act (TRA) of 2010 put off the reinstatement for two years (i.e., 2011 and
2012). For 2013, the American Taxpayer Relief Act of 2012 restored the phaseout
of personal and dependency exemptions.
5. Head of house- An unmarried individual who maintains a household for another and satisfies
hold certain conditions set forth in § 2(b). This status enables the taxpayer to use a
South-Western Federal Taxation Comprehensive, Chapter 3
1/4
