Bob provides more than half of his mother’s support. His mother earns $6,000 per year as a hairdresser. She lives in an apartment across town. Bob is unmarried and has no children. What is Bob’s most advantageous filing status?
- Single
- Head of household
- Qualifying single
- Supporting single
a
Jane is 20 years old and is a sophomore at Lake University. She is a full-time student and does not have any gross income. Jane spends the holidays and summers at home with her parents. Her total support for the current tax year is $30,000, including a scholarship for $5,000 to cover her tuition. Jane used $12,000 of her savings, and her grandparents provided $13,000. Which of the following statements regarding the dependency rules for Jane is true?
- If Jane’s parents (rather than her grandparents) provided the $13,000, then they would not be able to claim Jane as a dependent because Jane provided more than half of her own support.
- Jane’s grandparents can claim her as a dependent because Jane did not provide more than half of her own support.
- Jane’s grandparents cannot claim her as a dependent because Jane provided more than half of her own support.
- Jane does not qualify as a dependent for either her parents or grandparents.
c
In the current tax year, Blake Smith provided more than half of the support for his cousin, his niece, and a close family friend. Blake lives alone and sends a monthly support check to each person. None of the individuals whom Blake supports has any income or files a tax return. All three individuals are U.S. citizens. Which of the three people Blake supports can he claim as a dependent on his tax return?
- Cousin
- Niece
- Family friend
- None
b
Jeff and Rhonda are married and have two children, Max and Jen. Max is 20, attends college in the Los Angeles area full-time, and works as a stunt double for a television show while he is in school. Max earns $15,000 per year as a stunt double and lives at home when school is not in session. Jeff and Rhonda pay for Max’s tuition and all of his living expenses. Jen, who lives at home, is 18 years old and makes $18,000 per year working full-time as an office administrator. Jeff and Rhonda pay for 65% of Jen’s living expenses. In addition, Rhonda’s mother, Joanne (a widow), resides with the family, earns $3,000 per year in taxable interest and dividends from her investments, and receives $9,000 per year in nontaxable Social Security benefits. Jeff and Rhonda receive no rent from Joanne and provide all the support she needs for the year. Everyone mentioned is a U.S. citizen. How many people qualify as dependents for Jeff and Rhonda’s income tax return?
- Two
- Three
- Four
- Five
b
Katherine and Bill Grant have two children. Kelly is 22 years old and is a full-time student. She lives on campus at an out-of-state university but will return home for the summer. Kelly earns $5,000 a year working part-time. Her parents provide her with $15,000 of support, and her grandparents provide her with $15,000 of support. Jake is 15 years old and lives at home. He is fully supported by his parents. Jake’s friend Luke also lives with the Grants. Luke is 15 years old and moved into the Grant home in April. The Grants pay all of Luke’s support. How many total dependents may Katherine and Bill Grant claim for the current year?
- One
- Three
- Two
- Zero
c
Bill and Anne Chambers are married and file a joint return. They have no children. Their college friend, Ryan, lived with them for the entire current tax year. Ryan is 40 years old and earned $2,000 at a part-time job and received $25,000 in municipal bond interest. Ryan is a citizen of the United States and is unmarried. Which of the following statements is true regarding claiming Ryan as a dependent on the Chambers’ tax return?
- If Ryan earns $15,000 in self-employment income in addition to the part-time job and municipal bond interest, he will qualify as a dependent on the Chambers’ tax return.
- Ryan qualifies as a dependent for the Chambers under the qualifying child rules.
- As long as Ryan does not provide more than half of his own support, he qualifies as a dependent for the Chambers under the qualifying relative rules because he lived with them for the entire year.
- As long as the Chambers provide more than half of Ryan’s support, he qualifies as a dependent for the Chambers under the qualifying relative rules.
d
Susie, John, Luke, and Will provide support for their 80-year-old mother, Joyce. Joyce lives by herself in an apartment in Miami, Florida. Joyce earned $5,000 this year working at her church. Joyce provides 5% of her own support. Susie provides 30% of Joyce’s support, John provides 10% of Joyce’s support, Luke provides 15% of Joyce’s support, and Will provides 40% of Joyce’s support. Under a multiple support agreement, who may claim Joyce as a dependent?
- Susie, Luke, John, and Will
- Susie, Luke, and Will
- Susie and Will
- Will
b
Heather is single and has one son, Rhett, who is 19 years old. Rhett lived at home for four months of the current tax year before moving away to take a full-time job in another city. Heather provided more than half of Rhett’s support for the taxable year. Rhett earned $20,000 in gross income and is unmarried. Which of the following statements regarding the dependency rules for Rhett is true?
- Heather may claim Rhett as a dependent because he is a qualifying child.
- Heather may claim Rhett as a dependent because he is a qualifying relative.
- Rhett fails the age limit test for a qualifying child.
- Rhett must live with Heather for the entire year to meet the qualifying relative test.
c
Jonathan Jones is a 19-year-old full-time college student at the local community college. He lives in an apartment near campus during the school year and returns home for the summer break and holidays. Jonathan earned $5,000 this year working at the campus bookstore. His parents gave him $20,000 and his grandparents gave him $10,000 this year in support. Which of the following statements is true?
- Jonathan does not qualify as a dependent for his parents because his gross income is too high.
- Jonathan does not meet the residency test for a qualifying child.
- Jonathan’s grandparents can claim him as a dependent.
- Jonathan’s parents can claim him as a dependent.
d
In 2024, Madison and Nick Koz have two children, ages 8 and 10. Both children meet the definition of qualifying child. The Koz family has adjusted gross income of $300,000. What is the amount of the child tax credit on the couple’s income tax return?
- $1,000
- $2,000
- $3,000
- $4,000
d
Which of the following statements is true regarding the taxation of Social Security benefits?
- 85% is the maximum amount of taxable Social Security benefits.
- 50% is the maximum amount of taxable Social Security benefits.
- If a taxpayer’s only source of income is $10,000 of Social Security benefits, then 50% of the benefits are taxable.
- If a taxpayer’s only source of income is $10,000 of Social Security benefits, then 85% of the benefits are taxable.
a
Which of the following is taxable as gross income?
- Child support received based on a divorce agreement executed in 2015.
- Alimony received based on a divorce agreement executed in 2015.
- Child support received based on a divorce agreement executed in 2019.
- Alimony received based on a divorce agreement executed in 2019.
b
Parents lend $2,000,000 to their child to start a business. The loan is interest-free and is payable on demand. The imputed interest is subject to:
- The gift tax only in the year the parents lend the money.
- The gift tax only in the year the loan is repaid.
- The gift tax each year the loan is outstanding.
- An excise tax.
c
Which of the following is excluded from gross income on an individuals 2020 tax return?
- January 2021 Rent received in December 2020
- Value arising from personal use of company vehicle in 2020
- Dividends announced by a C corporation in December 2019 and received in January 2020
- Refundable security deposit received in January 2020 for a lease ending in July 2021
d