TESTBANK:INCOME
. .
TAX
FUNDAMENTALS,
.
38THEDITION,
. .
GERALDE.
. .
WHITTENBURG,
.
MARTHAALTUS-
. .
BULLER,STEVENGILL
. . .
,Chapter1:TheIndividualIncomeTaxReturn . . . . . .
1. A corporation is a reporting entity but not a tax-paying entity. True
. . . . . . . . . . .
False
2. Partnership capital gains and losses are allocated separately to each of the partners. True
. . . . . . . . . . . . .
False
3. Married taxpayers may double their standard deduction amount by filing separate
. . . . . . . . . .
returns.
.
True False
4. An item is not included in gross income unless the tax law specifies that the item is subject to
. . . . . . . . . . . . . . . . . .
taxation.
.
True False
5. For taxpayers who do not itemize deductions, the standard deduction amount is
. . . . . . . . . . .
subtracted from the taxpayer's adjusted gross income.
. . . . . . .
True False
6. A taxpayer with self-employment income of $600 must file a tax return. True
. . . . . . . . . . . .
False
7. A dependent child with earned income in excess of the available standard deduction amount
. . . . . . . . . . . . .
must file a tax return.
. . . . .
True False
8. A single taxpayer, who is not blind and who is under age 65, with income of $8,750 must file a
. . . . . . . . . . . . . . . . . . .
tax return.
. .
True False
,9. If a taxpayer is due a refund, it will be mailed to the taxpayer regardless of whether he or she
. . . . . . . . . . . . . . . . . . .
files a tax return.
. . . .
True False
10. Taxpayers with self-employment income of $400 or more must file a tax return. True
. . . . . . . . . . . . .
False
11. If your spouse dies during the tax year and you do not remarry, you must file as single for
. . . . . . . . . . . . . . . . . .
the year of death.
. . . .
True False
12. Taxpayers who do not qualify for married, head of household, or qualifying widow or
. . . . . . . . . . . . .
widower filing status must file as single.
. . . . . . .
True False
13. If an unmarried taxpayer paid more than half the cost of keeping a home which is the principal
. . . . . . . . . . . . . . . . .
place of residence of a nephew, who is not her dependent, she may use the head of household
. . . . . . . . . . . . . . . . . .
filing status.
. .
True False
14. The maximum official individual income tax rate for 2012 is 35 percent. True
. . . . . . . . . . . .
False
15. All taxpayers may use the tax rate schedule to determine their tax liability. True
. . . . . . . . . . . . .
False
16. The head of household tax rates are higher than the rates for a single taxpayer. True
. . . . . . . . . . . . . . .
False
17. Most states are community property states. . . . . .
True False
.
, 18. If taxpayers are married and living together at the end of the year, they must file a joint tax
. . . . . . . . . . . . . . . . . .
return.
.
True False
19. A taxpayer who maintains a household with an unmarried child may qualify to file as head of
. . . . . . . . . . . . . . . .
household even if the child is not the taxpayer's dependent.
. . . . . . . . . .
True False
20. A married person with a dependent child may choose to file as head of household if it reduces
. . . . . . . . . . . . . . . . .
his or her tax liability.
. . . . .
True False
21. A taxpayer who is living alone and is legally separated from his or her spouse under a separate
. . . . . . . . . . . . . . . . .
maintenance decree at year-end should file as single.
. . . . . . . .
True False
22. An individual, age 22, enrolled on a full-time basis at a trade school, is considered a student
. . . . . . . . . . . . . . . .
for purposes of determining whether a dependency exemption is permitted. TrueFalse
. . . . . . . . . . .
23. A dependency exemption may be claimed by the supporting taxpayer in the year of death of
. . . . . . . . . . . . . . .
a dependent.
. .
True False
24. For 2012, personal and dependency exemptions are $3,800 each. True
. . . . . . . . .
False
25. Scholarships received by a student may be excluded for purposes of the support test for
. . . . . . . . . . . . . .
determining the availability of the dependency exemption.
. . . . . . .
True False
. .
TAX
FUNDAMENTALS,
.
38THEDITION,
. .
GERALDE.
. .
WHITTENBURG,
.
MARTHAALTUS-
. .
BULLER,STEVENGILL
. . .
,Chapter1:TheIndividualIncomeTaxReturn . . . . . .
1. A corporation is a reporting entity but not a tax-paying entity. True
. . . . . . . . . . .
False
2. Partnership capital gains and losses are allocated separately to each of the partners. True
. . . . . . . . . . . . .
False
3. Married taxpayers may double their standard deduction amount by filing separate
. . . . . . . . . .
returns.
.
True False
4. An item is not included in gross income unless the tax law specifies that the item is subject to
. . . . . . . . . . . . . . . . . .
taxation.
.
True False
5. For taxpayers who do not itemize deductions, the standard deduction amount is
. . . . . . . . . . .
subtracted from the taxpayer's adjusted gross income.
. . . . . . .
True False
6. A taxpayer with self-employment income of $600 must file a tax return. True
. . . . . . . . . . . .
False
7. A dependent child with earned income in excess of the available standard deduction amount
. . . . . . . . . . . . .
must file a tax return.
. . . . .
True False
8. A single taxpayer, who is not blind and who is under age 65, with income of $8,750 must file a
. . . . . . . . . . . . . . . . . . .
tax return.
. .
True False
,9. If a taxpayer is due a refund, it will be mailed to the taxpayer regardless of whether he or she
. . . . . . . . . . . . . . . . . . .
files a tax return.
. . . .
True False
10. Taxpayers with self-employment income of $400 or more must file a tax return. True
. . . . . . . . . . . . .
False
11. If your spouse dies during the tax year and you do not remarry, you must file as single for
. . . . . . . . . . . . . . . . . .
the year of death.
. . . .
True False
12. Taxpayers who do not qualify for married, head of household, or qualifying widow or
. . . . . . . . . . . . .
widower filing status must file as single.
. . . . . . .
True False
13. If an unmarried taxpayer paid more than half the cost of keeping a home which is the principal
. . . . . . . . . . . . . . . . .
place of residence of a nephew, who is not her dependent, she may use the head of household
. . . . . . . . . . . . . . . . . .
filing status.
. .
True False
14. The maximum official individual income tax rate for 2012 is 35 percent. True
. . . . . . . . . . . .
False
15. All taxpayers may use the tax rate schedule to determine their tax liability. True
. . . . . . . . . . . . .
False
16. The head of household tax rates are higher than the rates for a single taxpayer. True
. . . . . . . . . . . . . . .
False
17. Most states are community property states. . . . . .
True False
.
, 18. If taxpayers are married and living together at the end of the year, they must file a joint tax
. . . . . . . . . . . . . . . . . .
return.
.
True False
19. A taxpayer who maintains a household with an unmarried child may qualify to file as head of
. . . . . . . . . . . . . . . .
household even if the child is not the taxpayer's dependent.
. . . . . . . . . .
True False
20. A married person with a dependent child may choose to file as head of household if it reduces
. . . . . . . . . . . . . . . . .
his or her tax liability.
. . . . .
True False
21. A taxpayer who is living alone and is legally separated from his or her spouse under a separate
. . . . . . . . . . . . . . . . .
maintenance decree at year-end should file as single.
. . . . . . . .
True False
22. An individual, age 22, enrolled on a full-time basis at a trade school, is considered a student
. . . . . . . . . . . . . . . .
for purposes of determining whether a dependency exemption is permitted. TrueFalse
. . . . . . . . . . .
23. A dependency exemption may be claimed by the supporting taxpayer in the year of death of
. . . . . . . . . . . . . . .
a dependent.
. .
True False
24. For 2012, personal and dependency exemptions are $3,800 each. True
. . . . . . . . .
False
25. Scholarships received by a student may be excluded for purposes of the support test for
. . . . . . . . . . . . . .
determining the availability of the dependency exemption.
. . . . . . .
True False
