Kaplan University AC 499 Quiz 7 (Graded)

| July 29, 2018

Grade Details – All Questions 1. Question : Heads of households: Student Answer: can only qualify if they have a dependent child living with them. can have dependent parents living in a separate residence, and still qualify as head of household. can have half of the cost of keeping a home paid by the dependent and still be classified as head of household. have the same tax rates as married taxpayers filing separately. 2. Question : Joan, 45 years old and unmarried, contributed $1,200 monthly in 2011 to the support of her parents’ household. The parents lived in an apartment rented by Joan and their income for 2011 consisted of $800 in interest. What is Joan’s filing status and how many exemptions should she claim on her 2011 tax return? Student Answer: None of these Head of household and 1 exemption Head of household and 3 exemptions Single and 3 exemptions 3. Question : Mr. Gold has a membership at the University Club. He pays the following during the year: Membership dues $600Business lunches 3,500Personal dinners with his wife 250How much may Mr. Gold deduct as entertainment expenses? Student Answer: $4,100 $2,050 $4,350 $1,750 4. Question : The tax formula for individuals contains the following: Student Answer: Gross Income minus Deductions and minus Exemptions is equal to the amount of Adjusted Gross Income. Adjusted Gross Income minus Deductions and minus Exemptions is equal to Taxable Income. Gross Income minus Adjusted Gross Income equals Taxable Income. Exemptions, Credits, and Deductions are subtracted from Adjusted Gross Income to calculate Taxable Income. 5. Question : An exemption can be claimed for a taxpayer’s child: Student Answer: in the year of birth not in the year of death. if the child is a premature baby kept in the hospital until after the end of the year. but the exemption must be prorated in the year of birth or death, based on the number of months the dependent was alive in those years. who works and pays more than half of his or her own support. 6. Question : If tax litigation against an individual taxpayer involves a penalty or an addition to taxes, who has the burden of proof? Student Answer: The IRS The taxpayer The party who initiates the case Both sides have the burden of proof 7. Question : Janet and Andrew paid the following amounts during 2011:Interest on automobile loan $1,200Interest on bank loan (proceeds were used to purchase municipal bonds) 2,000Qualified home mortgage interest 9,000Points on the acquisition of their home 1,000Loan appraisal fee 500What is the maximum amount they can use as interest expense in calculating itemized deductions for 2011? Student Answer: $10,000 $12,000 $13,700 $12,500 8. Question : A widow or widower: Student Answer: may benefit from the joint return rates for 2 years after the death of a spouse if there is a dependent child. may benefit from the joint return rates for 3 years after the death of a spouse if there is a dependent child. after the initial period of joint return rates, can use head of household rates after the death of a spouse even if the children are no longer dependents. can file a joint return in the year of the spouse’s death, but in the next year and thereafter must file as head of household if he or she has a dependent child. 9. Question : Alberta and Louis, ages 66 and 64 respectively, filed a joint return for 2011. They provided all of the support for their blind 19-year-old daughter, who had no gross income. They also provided the total support of Louis’s father, who is a French citizen and life-long resident of France. How many exemptions may they claim on their 2011 tax return? 10. Question : Wilhelmina is a divorced taxpayer who provides a home for her dependent child, Eloise. What filing status should Wilhelmina indicate on her tax return? Student Answer: Head of household Married, filing separately Single Qualifying widow(er)

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