1 / 1 point

Wilson’s spouse died in Year 1. Wilson did not remarry in Year

2 and lived alone the entire year. What is Wilson’s Year 2 filing
status?

a) Married filing jointly.

b) Head of household.

c) Single.

d) Surviving spouse.

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When the taxpayer does not qualify for any other filing status, he or she files as single.
Thompson does not qualify for any other filing status, so he must file as single.

Incorrect Answers:

A taxpayer must be married in the current year to file as married filing jointly.
A taxpayer must maintain a household for a dependent son or daughter (including adopted
children) to qualify as a surviving spouse. Wilson lived alone and therefore cannot file as a
surviving spouse.
A taxpayer must maintain a household that is the principal place of abode for a qualifying
individual for at least half the year. Wilson lived alone and therefore cannot file as head of
household.

1 / 1 point
Sarah owns an apartment building. Out of the rents received
each month, she pays herself a management fee. Where
should she report her income?

a) Both schedules C & E

b) None of the above

c) Schedule C only
 d) Schedule E only

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1 / 1 point
Which of the following tax credits can result in a refund even if
the individual had no income tax liability?

a) Earned income credit

b) Child and dependent care credit

c) Credit for prior year minimum tax

d) Elderly and permanently and totally disabled credit

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1 / 1 point
Brittany is a 22-year-old student with earned income of
$10,000 from a summer job and dividend income of $1,100.
Her parents claim her as a dependent on their tax return.
What is Brittany's basic standard deduction amount?
Mr. and Mrs. Grayson, both over age 65, elect joint return
status. They must file a return for 2020 if their combined gross
income equals or exceeds

a) $26,100

b) $27,400

c) $24,800

d) $1

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1 / 1 point
Which payment(s) is (are) included in a recipient's gross
income?
1. Payment to a graduate assistant for a part-time teaching
assignment at a university. Teaching is not a requirement
toward obtaining the degree.
2. A grant to a Ph.D. candidate for her participation in a
university-sponsored research project for the benefit of the
university.

a) 2. only

b) Both 1. and 2.

c) 1. only

d) Neither 1. nor 2.
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1 / 1 point
Terell has gambling losses totaling $7,000 during the current
year. Terell's adjusted gross income is $60,000, including
$3,000 in gambling winnings. Terell can itemize the
deductions. What amount of gambling losses is deductible?

a) $7,000

b) $3,000

c) $5,800

d) $0

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Gambling losses are deductible without regard to adjusted gross income. However, gambling
losses may only be deducted to the extent of gambling winnings.

1 / 1 point
An individual taxpayer earned $10,000 in investment income,
$8,000 in noninterest investment expenses, and $5,000 in
investment interest expense. How much is the taxpayer
allowed to deduct on the current year’s tax return for
investment interest expenses?

a) $2,000

b) $3,000

c) $5,000

d) $0
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Investment interest may be deducted only to the extent of net investment income, which is any
excess of investment income over investment expense. Net investment income equals $2,000
($10,000 investment income – $8,000 noninterest investment expenses), therefore, only $2,000
of interest expense may be deducted.

1 / 1 point
Which one of the following expenditures qualifies as a
deductible medical expense for tax purposes?

a) Transportation to physician’s office for required medical care.

b) Health club dues

c) Vitamins for general health not prescribed by a physician.

d) Mandatory employment taxes for basic coverage under Medicare A.

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1 / 1 point
Among which of the following related parties are losses from
sales and exchanges not recognized for tax purposes?

a) Brother and sister

b) Ancestors, lineal descendants, and all in-laws

c) Mother-in-law and daughter-in-law

d) Uncle and nephew

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