Chapter 4 T/F Flashcards Preview

HS321 CFP Income Taxation > Chapter 4 T/F > Flashcards

Flashcards in Chapter 4 T/F Deck (14)
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1
Q

A deductible contribution to an IRA is an above-the-line deduction

A

True

2
Q

The standard deduction for all individual taxpayers is $3,000.

A

False. The standard deduction amount varies according to the taxpayer’s filing status. These amounts are indexed annually for inflation.

3
Q

For the 2011 tax year, taxpayers with adjusted gross income over $150,000 are subject to an overall limitation on their itemized deductions

A

False. For 2011 there is not a limitation on itemized deductions as had been in prior tax years.

4
Q

A taxpayer who may be claimed as a dependent of another taxpayer will also be entitled to a personal exemption for himself or herself.

A

False. If a taxpayer can be claimed as a dependent of another taxpayer, that person is not entitled to a personal exemption for himself or herself.

5
Q

In order for an individual to be treated as a qualifying child of the taxpayer under the dependency exemption rules, the individual must not have provided more than half of his or her own support during the year.

A

True

6
Q

A father can claim a dependency exemption for his 18-year-old married daughter who files a joint return with her spouse who has substantial income.

A

False. A taxpayer may generally not claim a personal exemption for a child who is married and files a joint return with his or her spouse.

7
Q

The phaseout of a deduction or a tax credit can increase the effective rate of tax that taxpayers actually pay.

A

True

8
Q

A noncustodial parent may claim the child as a dependent if the custodial parent signs a written declaration agreeing not to claim the exemption for that year.

A

True

9
Q

The lowest marginal rate of tax on ordinary income is currently 25 percent.

A

False. The lowest marginal rate is currently 10 percent.

10
Q

To file as a surviving spouse, a taxpayer must maintain a residence for a child of the taxpayer for whom he or she is entitled to a dependency exemption.

A

True

11
Q

A taxpayer can qualify as a head of household by maintaining a parent in a nursing home.

A

True

12
Q

Under the kiddie tax rules, net unearned income of a child under a specified age is taxed at the marginal rate of the child’s parents.

A

True

13
Q

The kiddie tax applies only to income from assets received from a child’s parents.

A

False. The kiddie tax rules generally apply to unearned income of a child, regardless of whether the income-producing assets were received from the child’s parents.

14
Q

Corporations are generally required to file tax returns by April 15.

A

False. Corporations are required to file returns by the 15th day of the third month following the close of the taxable year.