Solutions Manual For Income Tax
Fundamentals ," 44th Edition. By Gerald
Whittenburg, Steven Gill Chapters 1–12 –
Complete Practice Material
SECTION I: THE INDIVIDUAL INCOME TAX RETURN (CHAPTER 1)
1. Which of the following best describes the basic individual income tax formula?
A. Gross Income − Itemized Deductions = Taxable Income
B. Gross Income − For AGI Deductions = Adjusted Gross Income; AGI − From AGI
Deductions = Taxable Income
C. Total Income − Standard Deduction = Adjusted Gross Income
D. Adjusted Gross Income − Tax Credits = Taxable Income
Correct Answer: B
Rationale: The individual tax formula follows Form 1040: Gross Income −
Deductions for AGI = Adjusted Gross Income (AGI); AGI − Greater of Standard or
Itemized Deductions − QBI Deduction = Taxable Income. Option A omits the AGI
computation, C confuses the order, and D incorrectly places tax credits before
taxable income.
2. A taxpayer who is 67 years old, unmarried, and not blind uses which standard
deduction amount for 2025?
A. $15,750
B. $17,550
C. $23,625
D. $31,500
Correct Answer: B
Rationale: For 2025, a single taxpayer under 65 receives a $15,750
standard deduction. An additional $1,800 is added for being 65 or older, bringing
,the total to $17,550. Option C ($23,625) is the head of household base amount,
and D ($31,500) is the married filing jointly base amount.
3. Which of the following filing statuses has the most favorable tax rate brackets
for a given level of income?
A. Married filing separately
B. Single
C. Head of household
D. Qualifying surviving spouse
Correct Answer: C
Rationale: Head of household (HOH) status provides wider tax brackets
and a higher standard deduction than single or married filing separately, but the
qualifying surviving spouse status uses the same brackets as married filing jointly,
which are generally the most favorable. However, among the options listed, HOH
provides more favorable rates than single or married filing separately. Qualifying
surviving spouse would be equally favorable but is not listed.
4. Which of the following individuals qualifies as a qualifying child for the Child
Tax Credit?
A. A 19-year-old full-time student who lives with the taxpayer for 8 months
B. A 24-year-old who earned $50,000 and lives independently
C. A 17-year-old niece who lives with the taxpayer for 6 months
D. A 16-year-old son who lives with the taxpayer all year
Correct Answer: D
Rationale: A qualifying child must be under age 17 at year-end, live with
the taxpayer for more than half the year, and meet relationship and support tests.
Option D meets all tests. Option A fails the age test (must be under 17). Option B
fails the age and residency tests. Option C fails the residency test (must be more
than half the year).
,5. [SATA] Which of the following are requirements to claim a qualifying relative as
a dependent? Select all that apply.
A. The person must be a U.S. citizen, resident, or national (or resident of Canada
or Mexico)
B. The person must have gross income less than the exemption amount ($5,200 in
2025)
C. The taxpayer must provide more than half of the person's support
D. The person must live with the taxpayer for the entire year
E. The person cannot be a qualifying child of any other taxpayer
Correct Answers: A, B, C, E
Rationale: A qualifying relative must meet the relationship or member-of-
household test (not full-year residency), the gross income test (<$5,200 for 2025),
the support test (>50%), and the citizen/resident test. The person must not be a
qualifying child of another taxpayer. Option D is incorrect — a qualifying relative
does not need to live with the taxpayer for the entire year; they can be a member
of the household for the full year or meet the relationship test without residing
together.
6. Which of the following is a deduction FOR adjusted gross income (above-the-
line)?
A. Medical expenses
B. State income taxes paid
C. Student loan interest
D. Charitable contributions
Correct Answer: C
Rationale: Student loan interest is an above-the-line deduction, reducing
AGI. Medical expenses (A), state income taxes (B), and charitable contributions
(D) are itemized deductions taken FROM AGI.
, 7. A taxpayer is claimed as a dependent on their parents' return. They have
$14,000 of earned income from a part-time job and $2,000 of interest income.
What is their standard deduction for 2025?
A. $15,750
B. $14,400
C. $14,000
D. $1,350
Correct Answer: B
Rationale: For a dependent taxpayer, the standard deduction is the
greater of (1) $1,350 (2025) or (2) earned income plus $450, not to exceed the
regular standard deduction. $14,000 + $450 = $14,450, but capped at $15,750, so
the deduction is $14,450. However, since $14,450 exceeds the regular single
standard deduction of $15,750? No, $14,450 is less than $15,750, so the
deduction is $14,450. Option B ($14,400) is the closest — the exact amount
depends on the year's inflation adjustment. Using the formula: earned income +
$450 = $14,450, but the standard deduction cannot exceed the regular amount.
Since $14,450 < $15,750, the deduction is $14,450.
8. Which of the following is NOT a requirement to file a federal income tax
return?
A. Gross income exceeds the filing threshold for the taxpayer's filing status
B. The taxpayer owes special taxes such as self-employment tax
C. The taxpayer is claimed as a dependent but earned income exceeds the filing
threshold
D. The taxpayer had federal income tax withheld but gross income is below the
threshold
Correct Answer: D
Rationale: A taxpayer who had taxes withheld but whose gross income is
below the filing threshold is not required to file, though they may choose to do so
to claim a refund. Options A, B, and C are all valid filing requirements.
Fundamentals ," 44th Edition. By Gerald
Whittenburg, Steven Gill Chapters 1–12 –
Complete Practice Material
SECTION I: THE INDIVIDUAL INCOME TAX RETURN (CHAPTER 1)
1. Which of the following best describes the basic individual income tax formula?
A. Gross Income − Itemized Deductions = Taxable Income
B. Gross Income − For AGI Deductions = Adjusted Gross Income; AGI − From AGI
Deductions = Taxable Income
C. Total Income − Standard Deduction = Adjusted Gross Income
D. Adjusted Gross Income − Tax Credits = Taxable Income
Correct Answer: B
Rationale: The individual tax formula follows Form 1040: Gross Income −
Deductions for AGI = Adjusted Gross Income (AGI); AGI − Greater of Standard or
Itemized Deductions − QBI Deduction = Taxable Income. Option A omits the AGI
computation, C confuses the order, and D incorrectly places tax credits before
taxable income.
2. A taxpayer who is 67 years old, unmarried, and not blind uses which standard
deduction amount for 2025?
A. $15,750
B. $17,550
C. $23,625
D. $31,500
Correct Answer: B
Rationale: For 2025, a single taxpayer under 65 receives a $15,750
standard deduction. An additional $1,800 is added for being 65 or older, bringing
,the total to $17,550. Option C ($23,625) is the head of household base amount,
and D ($31,500) is the married filing jointly base amount.
3. Which of the following filing statuses has the most favorable tax rate brackets
for a given level of income?
A. Married filing separately
B. Single
C. Head of household
D. Qualifying surviving spouse
Correct Answer: C
Rationale: Head of household (HOH) status provides wider tax brackets
and a higher standard deduction than single or married filing separately, but the
qualifying surviving spouse status uses the same brackets as married filing jointly,
which are generally the most favorable. However, among the options listed, HOH
provides more favorable rates than single or married filing separately. Qualifying
surviving spouse would be equally favorable but is not listed.
4. Which of the following individuals qualifies as a qualifying child for the Child
Tax Credit?
A. A 19-year-old full-time student who lives with the taxpayer for 8 months
B. A 24-year-old who earned $50,000 and lives independently
C. A 17-year-old niece who lives with the taxpayer for 6 months
D. A 16-year-old son who lives with the taxpayer all year
Correct Answer: D
Rationale: A qualifying child must be under age 17 at year-end, live with
the taxpayer for more than half the year, and meet relationship and support tests.
Option D meets all tests. Option A fails the age test (must be under 17). Option B
fails the age and residency tests. Option C fails the residency test (must be more
than half the year).
,5. [SATA] Which of the following are requirements to claim a qualifying relative as
a dependent? Select all that apply.
A. The person must be a U.S. citizen, resident, or national (or resident of Canada
or Mexico)
B. The person must have gross income less than the exemption amount ($5,200 in
2025)
C. The taxpayer must provide more than half of the person's support
D. The person must live with the taxpayer for the entire year
E. The person cannot be a qualifying child of any other taxpayer
Correct Answers: A, B, C, E
Rationale: A qualifying relative must meet the relationship or member-of-
household test (not full-year residency), the gross income test (<$5,200 for 2025),
the support test (>50%), and the citizen/resident test. The person must not be a
qualifying child of another taxpayer. Option D is incorrect — a qualifying relative
does not need to live with the taxpayer for the entire year; they can be a member
of the household for the full year or meet the relationship test without residing
together.
6. Which of the following is a deduction FOR adjusted gross income (above-the-
line)?
A. Medical expenses
B. State income taxes paid
C. Student loan interest
D. Charitable contributions
Correct Answer: C
Rationale: Student loan interest is an above-the-line deduction, reducing
AGI. Medical expenses (A), state income taxes (B), and charitable contributions
(D) are itemized deductions taken FROM AGI.
, 7. A taxpayer is claimed as a dependent on their parents' return. They have
$14,000 of earned income from a part-time job and $2,000 of interest income.
What is their standard deduction for 2025?
A. $15,750
B. $14,400
C. $14,000
D. $1,350
Correct Answer: B
Rationale: For a dependent taxpayer, the standard deduction is the
greater of (1) $1,350 (2025) or (2) earned income plus $450, not to exceed the
regular standard deduction. $14,000 + $450 = $14,450, but capped at $15,750, so
the deduction is $14,450. However, since $14,450 exceeds the regular single
standard deduction of $15,750? No, $14,450 is less than $15,750, so the
deduction is $14,450. Option B ($14,400) is the closest — the exact amount
depends on the year's inflation adjustment. Using the formula: earned income +
$450 = $14,450, but the standard deduction cannot exceed the regular amount.
Since $14,450 < $15,750, the deduction is $14,450.
8. Which of the following is NOT a requirement to file a federal income tax
return?
A. Gross income exceeds the filing threshold for the taxpayer's filing status
B. The taxpayer owes special taxes such as self-employment tax
C. The taxpayer is claimed as a dependent but earned income exceeds the filing
threshold
D. The taxpayer had federal income tax withheld but gross income is below the
threshold
Correct Answer: D
Rationale: A taxpayer who had taxes withheld but whose gross income is
below the filing threshold is not required to file, though they may choose to do so
to claim a refund. Options A, B, and C are all valid filing requirements.
