Chapters 9 & 10- Gleim Questions

8.1.6 For purposes of claiming the Earned Income Credit, a qualifying child could be any of the following except A. Your 20-year-old unemployed child B. Your child who is <19 C. Your 22-year-old grandson who is a full-time student D. Your 40-year-old permanently disabled stepson

A

8.3.5 Mr. and Mrs. Wilson's 5 yr old son, Dennis, goes to kindergarten in the morning. In the afternoon, he attends a day-care center. The cost of sending Dennis to the day-care center for the current year was $3,400. Mr. Wilson's earned income was $40,000 and Mrs. Wilson's earned income was $2,100. Based on the above information, the amount of the Wilson's work-related expenses used to figure the child and dependent care credit for the year cannot be more than A. $2,100 B. $3,000 C. $3,400 D. $6,000

A

6.1.1 Which of the following expenses does not qualify as a deductible medical expense? A. Cost of long-term care for a developmentally disable person in a relative's home B. Special school for a deaf child to learn lip reading C. Cost of elevator installed for individual who had heart bypass surgery (in excess of increase in value of individual's home) D. Cost and care of guide dogs used by a blind person in his business

A

6.1.11 Ruth and Mark Cline are married and will file a joint income tax return this year. Among their expenditures during this year were the following discretionary costs that they incurred for the sole purpose of improving their physical appearance and self-esteem: Face-lift for Ruth, performed by a licensed surgeon $5,000 Hair transplant for Mark, performed by a licensed surgeon $3,600 Disregarding the AGI percentage threshold, what total amount of the aforementioned doctor's bills may be claimed by the Clines in their current year return as qualifying medical expenses? A. $0 B. $3,600 C. $5,000 D. $8,600

A

6.2.2 All of the following taxes are deductible on Schedule A (Form 1040) except A. State or local inheritance tax B. State income tax C. State real estate tax on a personal residence D. Personal property taxes

A

6.3.11 During the current year, William Clark , an employee of Helton Corporation, was assessed a deficiency on his federal income tax return from the prvious year. As a result of this assessment, he was required to pay $1,120 determined as follows: Additional tax $900 Late filing penalty: $60 Negligence penalty $90 Interest: $70 The additional assessment is the result of a deduction claimed with respect to Clark's personal residence. What portion of the $1,120 outlay qualifies as itemized deductions for the current year? A. $0 B. $10 C. $220 D. $970

A

6.3.7 The amount of investment interest deductible in the current year is limited to A. Net investment income B. Net investment income plus $10,000 C. Net investment income plus 10% of the excess, limited to $1,000 D. Net investment income plus $4,500

A

6.3.8 Mr. and Mrs. L are calendar-year, cash-basis taxpayers. They have their own business, which they operate as a sole proprietorship. In addition, they own several investments including a 4-year-old rental property in whose operations they do not materially participate. Mr. and Mrs. L are not involved in a real property trade or business for purposes of Sec. 469. In the current year, the rental property produced a net loss of $40,000 including interest expense of $90,000. In addition, Mr. and Mrs. L paid the following amounts of interest expense: Interest on home mortgage: $4,500 Interest on business loan: $35,500 Interest on loan to purchase 10,000 shares of ABC Corporation stock: $45,000 Mr. and Mrs. L had no dividend or interest income in the current year. If they file a joint return, what is the total amount deductible as investment interest on their 1040 for the current year? A. $0 B. $2,000 C. $9,000 D. $37,500

A

6.4.12 For 2018, Mrs. Lynn had AGI income of $30,000. During the year, she contributed $9,000 in cash to her church, $10,000 in cash to a qualified public charity, and a painting she has owned for 8 years with a FMV of $16,000 and a $4,000 AGI to her city's library. What is the amount of Mrs. Lynn's allowable charitable contributions deduction for the year? A. $18,000 B. $19,000 C. $30,000 D. $35,000

A

6.4.13 Staurt Green had AGI during the year of $200,000 and made contributions to qualified charities as follows: (Basis/FMV) Cash: $10,000/$10,000 Inventory: $6,000/$8,000 IBM stock: $8,000/$5,000 Green's charitable contribution deduction is A. $21,000 B. $23,000 C. $24,000 D. $26,000

A

6.4.4 During the current year, Vincent Tally gave to the municipal art museum title to his private collection of rare books that was appraised and valued at $60,000. However, he reserved the right to the collection's use and possession during his lifetime. For the current year, he reported an AGI of $100,00. Assuming that this was his only contribution during the year, and that there were no carryovers from prior years, what amount can he deduct as contributions for the current year? A. $0 B. $30,000 C. $50,000 D. $60,000

A

7.2.10 Mr. N, who is unmarried, wants to file as a single person for the current year. Which of the following will prevent her from filing as a single person? A. Her spouse lived in her home for the final 6 months of the year B. She and her husband did not commingle funds for support purposes C. She paid more than half the cost of keeping up her home for the year D. Her home was, for more than 6 months of the year, the principal home of her son whom she can claim as a dependent

A

7.2.12 Mr. A, a calendar year taxpayer, died Jan. 15th of Year 2. His widow, Mrs. A, remarried Dec. 15 of Year 2. The last year for which a joint return may be filed for Mr and Mrs. A is year... A. 1 B. 2 C. 3 D. 4

A

7.2.7 During 2018, Robert Moore, 50 and unmarried, maintained his home, which he and his widowed father, 75, resided. His father had $4,000 interest income from a savings account and also received $2,400 from Social Security during the current year. Robert provided 60% of his father's support for the current year. What is Robert's filing status for the current year, and how many dependency exemptions should he claim on his tax return? A. HH and 1 dependency exemption B. Single and no dependency C. HH and no dependency D. Single and one dependency

A

8.1.4 Which of the following items is considered earned income credit for the Earned Income Credit? A. Self-employment income earned from a sole proprietorship B. Interest on savings accounts C. Capital gains on stock sales D. Rental income for which no services are performed

A

8.1.5 In the current year, Alex Burgos, who is 24, paid $600 to Rita, his ex-wife, for child support. Under the terms of his divorce decree, Alex claims for any dependency purposes his 3-year-old son, William, who lived with Rita for the entire year. Alex's only income in the current year was from wages of $16,000, resulting in an income tax of $400. How much is Alex's Earned Income Credit for the current year? A. $0 B. $519 C. $3,461 D. $5,716

A

6.1.4 Al Daly's AGI for the year ended Dec. 31, year 1, was $20,000. He was not covered by any medical insurance plan. During Year 1, he paid $500 to a physician for treatment of a heart condition. He also owed the physician $900 for an operation performed in Dec., year 1, which he paid in Jan. year 2. In addition, Daly incurred a $1,700 hospital bill in Year 1, which he charged to his bank credit card in Dec. Year 1, and paid to the bank in Jan. Year 2. Daly's total allowable medical deduction for Year 1 is A. $0 B. $700 C. $1,200 D. $2,200

B

6.1.6 Josef had to have the following improvements made to his home in the current year because he was handicapped: Ramps (Jan. 1) $300 Increase in home value because of ramp $0 Decorative lattice work over ramp area (Jan. 2) $100 Increase in value of home due to lattice work $0 Cost of chair lift on stairs (Jan. 2) $2,500 Increase in home value bc of chair life $1,500 Cost of repairing ramps (Dec. 1) $50 Cost of repairing chair lift (Dec. 1) $200 None of the expenses were covered by insurance. How much would qualify as a deductible medical expense in the current year (before any limitations)? A. $1,450 B. $1,550 C. $2,800 D. $3,050

B

6.1.7 Mr. E, a 50-year-old, single taxpayer, had an AGI of $10,000 for the current year. In addition, he paid the following expenses: Surgeon's fee (outpatient) $600 Psychiatrist's fee $700 Hospital bill as follows: Medical services $300 Meals in hospital $200 Hospital room charge $500 Transportation to/from doctor's office $50 Contact lenses $200 Prescription drugs $80 Vitamins for general health $60 Weight-loss program $300 Chiropractor's fee $400 Mr. E also paid $900 for medical insurance premiums and received reimbursement of $850 from the insurance company on claims for the above expenses. Compute Mr. E's current-year medical deduction for Schedule A. A. $2,180 B. $2,330 C. $2,580 D. $3,080

B

6.2.5 During the current year, Paul and Mary Davis, cash-basis taxpayers, paid the following taxes: State income taxes withheld $300 Est. federal income tax $250 Est. state income tax $1,500 Sales tax on new auto used 60% for business $1,400 State gift tax $1,000 Property tax, including $50 for trash pick-up $2,600 Property tax on their vacation home in Canada $1,000 What amount can Mary and Paul claim as an itemized deduction on their current-year federal income tax return? A. $4,350 B. $5,350 C. $6,350 D. $6,400

B

6.2.6 During the current year, Jack and Mary Bronson paid the following taxes: Taxes on residence (for period Jan. 1 to Sept. 30 of the current year) $2,700 State motor vehicle tax on value of car $360 The Bronsons sold their house on June 30 of the current year under an agreement in which the real estate taxes were not prorated between the buyer and sellers. What amount should the Bronsons deduct as taxes in calculating itemized deductions for the current year? A. $1,800 B. $2,160 C. $2,700 D. $3,060

B

6.2.8 Ms. L, cash-basis, lives in a county where the real estate tax year runs from July 1 to June 30. The tax bills are due in two installments- July 1 and Jan 1. Ms. L purchased her first house on Sept 1 of the current year. As part of her purchase price, she reimbursed the sellers $700 for her share of the current-year real estate taxes. At the date of purchase, she also paid her mortgage company $450, which was credited to her tax escrow account. From her monthly mortgage payments in the current year, a total $600 was credited to her tax escrow account. On Jan 4 of the following year, the bank paid the escrow balance to the county tax office. L's real estate tax deduction for the current year is A. $450 B. $700 C. $1,150 D. $1,750

B

6.3.10 For the year ending Dec. 31, David Roth, a married taxpayer filing jointly, reported the following: Investment income from dividends and interest: $24,000 Long-term capital gains on stock held for investment (Roth elects to treat the gain as ordinary income): $25,000 Investment expense: $4,000 Interest expense on funds borrowed in the current year to purchase investment property: $70,000 What amount can Roth deduct this year as investment interest expense? A. $22,000 B. $45,000 C. $49,000 D. $70,000

B

6.3.3 Earl took out a mortgage on his home for $250,000 in Year 1. He filed as a single for Year 10. In April Year 10, when the home had a FMV of $430,000, Earl took out a home equity loan for $140,000. He used the proceeds as follows: 1. $90,000 for home improvements 2. $30,000 for payment of credit card debt 3. $20,000 for purchase of securities that produce tax-free income How much of the $140,000 loan would produce deductible mortgage interest in Year 10. A. $0 B. $90,000 C. $120,000 D. $140,000

B

6.3.6 Which of the following payments may be deducted in full in the current year as interest expense on Form 1040, Schedule A? 1. Mortgage prepayment penalty 2. Interest relating to tax-exempt interest income 3. Installment plan interest for clothes purchases 4. Mortgage interest 5. Credit investigation fees A. 1, 3, 5 B. 1, 4 C. 2, 4, 5 D. 3, 4

B

6.4.1 Money or property given to the following is deductible as charitable contributions except A. Nonprofit schools or hospitals B. Civic leagues and chambers of commerce C. Churches, synagogues, temples, mosques, and other religious organizations D. War veterans group

B

6.4.10 On Dec. 15 of the current year, Donald Calder made a contribution of $500 to a qualified charitable organization by charging the contribution to his credit card. Calder paid the $500 on Jan 20 of the following year, upon receipt of the bill from the bank. In addition, Calder issued and delivered a promissory note for $1,000 to another qualified charitable organization on Nov. 1 of the current year, which he paid upon maturity 6mos later. If Calder itemizes his deductions, what portion of these contributions is deductible in the current year? A. $0 B. $500 C. $1,000 D. $1,500

B

6.4.2 Donations to all of the following organizations are deductible as charitable contributions except a A. Charitable community chest B. Local chamber of commerce C. Nonprofit hospital D. Charitable fund of a domestic fraternal society operating under the lodge system

B

6.4.8 Mr. U is actively involved in church activities in his community. During the current year, he incurred the following church-related expenses: Cash contributed to the church: $2,000 Round-trip mileage to attend church services: $56 Round-trip mileage to do church volunteer work: $70 FMV of used clothing given to church mission: $500 Raffle tickets purchased from the church: $200 Value of time and services contributed to the church: $400 Mr. U's AGI is $25,000 and he itemizes his deductions on his tax return. What is his charitable contribution deduction? A. $2,500 B. $2,570 C. $2,770 D. $3,226

B

7.1.10 In the current year, Sam Funn provided more than half the support for his wife, his father's brother, and his cousin. Sam's wife was the only relative who was member of Sam's household. None of the relatives had income, nor did any of them file a individual or joint return. All of these relatives are US citizens. Which of these relatives should be claimed as dependent or dependents on Sam's current year joint return? A. Only his wife B. Only his uncle C. Only his cousin D. All of 3

B

7.1.4 When figuring if a dependent child who is a full-time student meets the support test, all of the following items are taken into account in determining support except A. Food B. Scholarships C. Recreation D. Birthday presents

B

7.1.5 Mr. and Mrs. P are filing a joint return for the current year. They have 2 children. Marie, who is 18, earned $4,200 from a part-time job. James who is 24 and attends college as a full-time student, earned $4,100 during the summer. Mr and Mrs. P provide over 50% of their children's support. Mr. P's mother also lives with them but is self-supporting. How many dependency exemptions can Mr. and Mrs. P claim on their current year return? A. 0 B. 1 C. 2 D. 3

B

7.1.8 Mr and Mrs. X, both 50, are filing a join return and have AGI of $75,000 for 2018. Their son, who is blind, is a full-time student and is entirely supported by Mr. and Mrs. X also contributed more than half of the total support of their daughter, who lived with them until her marriage in Nov. Their daughter and her husband had gross income for the year of $1,000 and $1,500, respectively, and filed a joint return to recover income tax withheld. How many dependency exemptions may Mr. and Mrs. X claim? A. 1 B. 2 C. 3 D. 4

B

7.2.8 Mrs. Oak was divorced on Jan 1 of the current year. She had an unmarried son living in her home for the entire year. It cost $3,000 to maintain Mrs. Oak's home for the year, of which she contributed $2,000 and Joe Oak, ex-husband, contributed $1,000 through support payments. Joe Oak, however, provides more than 50% of their son's support and claims him as a dependent. What is the most advantageous filing status for which Mrs. Oak can qualify? A. MFJ B. HH C. MFS D. Single

B

7.2.9 Mr. W died early in the current year. Mrs. W remarried in Dec. of the same year and therefore was unable to file a joint return with Mr. W. What is the filing status of the decedent, Mr. W? A. Single B. MFS C. MFJ D. HH

B

8.1.14 The child tax credit is a nonrefundable credit. A. True B. False

B

8.3.4 Bethany is single and has adjusted gross income of $40,000. Bethany works full-time and keeps up a home for herself and her dependent father, who is not able to care for himself. She pays a housekeeper $1,100 per month to care for and provide meals to her father. What is the maximum amount of annual housekeeper expenses that Bethany can use to compute her dependent care credit? A. $1,320 B. $3,000 C. $3,600 D. $6,000

B

6.1.3 Which one of the following expenditures qualifies as a deductible medical expense for tax purposes? A. Vitamins for general health not prescribed by a physician B. Health club dues C. Transportation to physician's office for required medical care D. Mandatory employment taxes for basic coverage under Medicare A. Taxpayer is covered by social security

C

6.1.5 Scott is an 8-year-old with a rare lung problem. His doctor wants him to be examined by a specialist at the Mayo Clinic. Scott and his mother travel to Rochester, MI. Scott is not sick enough to be admitted to the hospital, so he stays in a nearby hotel from which he can go to the hospital daily for the specialist to monitor his reaction to a new drug. Scott and his mother have separate rooms so that Scott can rest properly. They remain for 10 nights and all the rooms each cost $60 per night. How much is allowable as a medical expense? A. $500 B. $600 C. $1,000 D. $1,200

C

6.1.8 Which of the following is deductible as medical insurance? A. Medical portion of auto insurance policy that provides coverage for all persons injured in or by the taxpayer's car B. Insurance policy that pays you $50 a day if you are unable to work due to illness or injury C. Medicare part B D. None of the answers are correct

C

6.2.1 Taxes are deductible as an itemized deductions include all of the following except A. Real estate taxes based on the assessed vale of the property and charged uniformly against all property B. State and local income taxes C. Taxes that the taxpayer paid on property owned by his or her parents or children D. Personal property taxes based on the value of the personal property

C

6.2.3 Which of the following taxes may be deducted on Form 1040, Schedule A? A. Homeowner's association charges B. Assessments for sewer lines C. State income taxes on municipal bond interest D. State and local taxes on gasoline

C

6.2.9 Mr and Mrs. Smith's real property tax year is the calendar year. Real estate taxes for the previous year are assessed in their state on Jan 2 and become due on May 1 and Oct 1. The tax becomes a lien on May 1. The Smiths bought a home on July 1 of the current year. The real estate taxes on the home for the previous year, which became due in the current year, were $1,000. The Smiths agreed to pay the $1,000 after the sale. They paid $500 in late taxes on Aug 1 and $500 on Oct 1. How should the Smiths treat the tax payments for federal income tax purposes for the current year? A. The entire $1,000 is deductible B. They may deduct only the $500 payment made on Oct. 1 C. They may not deduct any amount but must add the $1,000 to the cost of their home D. They may deduct only the $500 payment made on Aug. 1 as a settlement fee or closing cost

C

6.4.11 For 2018, Ms. Shickle had AGI of $40,000. She contributed $28,000 cash to a church and $6,000 cash to a private non-operating foundation which is subject to the 30% limitation. What is the amount of Shickle's charitable deduction for the year and the amount to be carried over? (Deduction/Carry Over) A. $24,000/$0 B. $24,000/$6,000 C. $24,000/10,000 D. $30,000/$0

C

6.4.3 On Dec. 20th of the current year, Mr and Mrs. Garrison purchased four tickets for a New Year's Ever party at their church, a qualified charitable organization. Each ticket cost $75 and had a FMV of $50. The Garrisons gave 2 of the tickets to a needy family in the community. Mr. Garrison tended bar at the party from 8pm to 4am and was paid $40. The usual charge for such services is $80. Immediately before midnight, Mr. Garrison pledged $200 to the building fund and delivered a check for that amount on Jan 2 of the following year. Of the amounts described above, the total amount which the Garrisons can include as a charitable contribution deduction for the current year on a joint return is A. $340 B. $140 C. $100 D. $50

C

6.4.9 An individual may deduct contributions to most charities up to 50% of AGI. Hoever, some contributions have other limits. These limits include (but are not limited to) A. 40% and 30% B. 30% and 10% C. 30% and 20% D. 40% and 20%

C

7.1.6 Jim Planter, who reached age 65 on Jan 1 of the current year, filed a joint return for the year with his wife, Rita, age 50. Mary, their 21 year old daughter, was a full-time student at a college until her graduation on June 2 of the current year. The daughter had $7,050 of income and provided 25% of her own support during the year. In addition, during the year, the Planters were the sole support for Rita's niece, who had no income and lived with them the entire year. How many dependency exemptions should the Planters claim on their current-year tax return? A. 0 B. 1 C. 2 D. 3

C

7.1.9 Mr. and Mrs. D file a joint return for the current year. Mr. D is 67 and Mrs. D is 52. They provide 80% of the support for their son Tom who is 17, single and has wages of $4,450. On their respective tax returns for the current year, Mr and Mrs D should claim which of the following number of dependency exemptions? A. 4 B. 3 C. 1 D. 2

C

7.2.11 Mrs. W's husband died in Year 1. She has not remarried and has maintained a home for herself and her dependent son, whose personal exemption she can claim. In the summer of Year 3, the son was killed in automobile accident. What is Mrs. W's filing status for year 3? A. Single B. MFJ C. Qualifying widow D. HH

C

7.2.14 Emil Gow's wife died in year 1. Emil did not remarry, and he continued to maintain a home for himself and his dependent infant child during Year 2 and Year 3, providing full support for himself and his child during these years. For Year 1, Emil properly filed a joint return. For Year 3, Emil's filing status is A. Single B. HH C. Qualifying widow with dependent child D. MFJ

C

7.2.6 Which of the following is not a requirement that must be met in determining whether a taxpayer is considered unmarried for HH status purposes? A. An individual must file a separate return B. An individual must pay more than 50% the cost of keeping a home for the tax year C. For the entire year, an individual's home must be the main home of his child, stepchild or adopted child, whom he or the noncustodial parent can properly claim as a dependent D. An individual's spouse must not have lived in their home for the last 6 months of the tax year

C

8.1.1 All of the following individuals, who meet the income and residency requirements, qualify for the Earned Income Credit except: A. A 19-year old head of household with a qualifying child A. A 45-year-old single individual C. A 22-year-old married individual whose spouse is 18 D. A 60-year-old man married individual

C

8.1.3 All of the following statements regarding qualification for the Earned Income Credit are true except: A. The tax return claiming the credit must cover a full 12 months (unless a short period return is required due to the taxpayers death) B. The taxpayer's principal residence must be in the United States for more than 1/2 of the taxable year C. The taxpayer's filing status must be either married filing jointly or head of household D. The taxpayer must have received earned income during the year

C

8.1.7 Which of the following is not disqualified income for purposes of the Earned Income Credit? A. Net capital gain income B. Net rent and royalty income C. Income earned from part-time employment D. Tax-exempt interest income

C

8.1.9 For which of the following dependent children will a parent not be allowed a child tax credit? A. 15 yr old daughter B. 12 yr old foster C. 19 yr old stepchild D. 16 yr old stepchild

C

6.1.10 During Year 2, Scott charged $4,000 on his credit card for his dependent son's medical expenses. Payment to the credit card company had not been made by the time Scott filed his income tax return in Year 3. However, in Year 2, Scott paid a physician $2,800 for the medical expenses of his wife who died in year 1. Disregarding the AGI percentage threshold, what amount could Scott claim in his Year 2 income tax return for medical expenses? A. $0 B. $2,800 C. $4,000 D. $6,800

D

6.1.2 Which of the following qualify as deductible medical expenses? 1. Payments to physician 2. Payments for elective cosmetic face-lifting operation 3. Medical portion of your auto insurance premium 4. Payments for acupuncture service 5. Domestic help A. 1, 3, 5 B. 1 and 5 C. 1, 2, 4 D. 1 and 4

D

6.1.9 Gail and Jeff Payne are married and file a joint return for the current year. During the year, they paid the following doctor's bills: $700 bill for Gail's mother, who received over half of her support from Gail and Jeff but who does not live in the Payne household and who earned $2,000 in the current year for baby-sitting $500 bill for the unmarried 26-year-old, who earned $4,000 in the current year but was fully supported by his parents. He is not a full-time student Disregarding the AGI percentage test, how much of these doctor's bills may be included on the Payne's joint return in the current year as qualifying medical expenses? A. $0 B. $500 C. $700 D. $1,200

D

6.2.10 Fred Harvey, cash-basis, elected to itemize his deductions on year 2 income tax return. Harvey plans to itemize again in Year 3. The following information relating to his state income taxes is available: Taxes withheld in Year 3 $2,500 Refund received in Year 3 of Year 2 tax $500 Assessment paid in Year 3 of Year 1 tax $700 The above information should be reported by Harvey in his Year 3 tax return as A. State and local income taxes of $2,500 B. State and local income taxes of $2,700 C. State and local income taxes of $3,200 D. State and local income taxes of $3,200 and gross income state and local income tax refund of $500

D

6.2.4 George Burke, a salaried taxpayer, paid the following taxes which were not incurred in connection with a trade or business during the current year: Federal income tax (withheld by employer) $1,500 State income tax (withheld by employer) $1,000 FICA tax (withheld by employer) $700 State sales taxes $900 Federal auto gasoline taxes $200 Federal excise tax on telephone bills $50 What taxes are allowable deductions from Burke's AGI for the current year? A. $2,850 B. $2,550 C. $1,900 D. $1,000

D

6.2.7 In the current year, Smith paid $6,000 to the tax collector of Big City for realty taxes on a two-family house owned by Smith's mother. Of this amount, $2,800 covered back taxes for the previous year, and $3,200 covered the current-year taxes. Smith resides on the 2nd floor of the house and his mother resides on the 1st floor. In Smith's itemized deductions on his current-year return, what amount was Smith entitled to claim for realty taxes? A. $6,000 B. $3,200 C. $3,000 D. $0

D

6.3.2 In the current year, Mr. A, a sole proprietor, made interest payments of $800 on his personal credit cards, $650 on his business truck loan, $3,000 to the bank for a loan origination fee (charged for services) for his Veterans Affair mortgage, and $8,000 on his home mortgage. What is the total allowable interest deduction on Schedule A, Form 1040? A. $12,450 B. $11,800 C. $9,450 D. $8,000

D

6.3.4 Which of the following types of interest payments, not allowed because of one of the limitations, may be carried over to the next year? A. Interest on a personal car loan B. Interest on credit cards C. Interest on a personal residence mortgage D. Interest on money borrowed to buy stocks

D

6.4.5 During the current year, Mr. K, who is single and 45, made cash contributions of $500 to his church. Mr. K is taking the standard deduction on his current-year return. What is the amount of Mr. K's deduction for charitable contributions? A. $500 B. $300 C. $75 D. $0

D

7.2.1 Mrs. Doe, by herself maintains her home in which she and her unmarried daughter resided for the entire year. Her daughter, however, does not qualify as her dependent. Mrs. Doe's husband died last year. What is her filing status for the current year? A. Qualifying widow B. MFJ C. Head of Household D. Single

D

7.2.4 James and Edna Smith are a childless married couple who lived apart for all of the current year. On Dec. 31 they were legally separated under a decree of separate maintenance. Which of the following is the only filing status choice available to them for the current year? A. MFJ B. MFS C. HH D. Single

D

8.1.11 Jerry and Lori, who are married and file a joint return, have two qualifying children and earned income of $31,000 in 2018. What is the amount of their child tax credit for 2018? A. $0 B. $2,000 C. $700 D. $3,500

D

8.1.2 If a taxpayer qualifies for the Earned Income Credit, such credit can be subtracted from A. Gross income to arrive at adjustment gross income B. AGI to arrive at taxable income C. The tax owed, or can result in refund, but only if the taxpayer had tax withheld from wages D. The tax owed, or can results in a refund, even if the taxpayer had no tax withheld from wages

D

8.3.1 Which of the following statements is not a general requirement to qualify for the child and dependent care credit? A. The qualifying individual must not provide more than 50% of his or her own support B. Your expenditures must be necessary to enable you to be gainfully employed C. Your payments for services must not be to dependent relatives D. You must be divorced or legally separated when you incur the expense

D