Questions -
1. Lisa and Luis, ages 43 and 38, are married and file a joint return. In addition to having FOUR dependent children (Yandra, Kayanna, Niosha and Lisbec), Lisa and Luis have adjusted gross income ("AGI") of $90,000 and itemized deductions of $22,000. What is their taxable income for 2014?
a. $44,300
b. $52,200
c. $68,000
d. $90,000
2. In 2014, Andrew, age 17, had $1,000 of interest from a certificate of deposit and $4,000 from working as a waiter. Assume Andrew is claimed by his parents as a dependent. What is Andrew's standard deduction?
a. $6,200
b. $4,350
c. $1,000
d. $0
3. What is Mercedes's Taxable Income for 2014? Assume she is 34 years old and is single and has no dependents. Assume further that Mercedes's AGI is $88,000 and that she made a charitable contribution of $250 (which would be her only itemized deduction).
a. $77,850
b. $81,800
c. $87,750
d. $88,000
4. What is Lydia's taxable income for 2014? Assume she is single and claimed TWO dependent children, Jason and Cesar. Assume further that Lydia's AGI is $60,000 and that her itemized deductions are $13,000.
a. $35,150
b. $39,100
c. $47,000
d. $60,000
5. A few years ago, Frank and Felix formed a partnership called "F&F." Which of the following is most likely TRUE regarding the U.S. income taxation of Frank, Felix and F&F?
a. The F&F entity is NOT required to file an informational tax return
b. The F&F entity will most likely be taxed like a corporation
c. The F&F entity is NOT required to pay federal income taxes
d. Felix and Frank will NOT be required to pay taxes on their respective shares of F&F's income until F&F actually distributes the earnings to them
6. Which doctrine will most likely prevent Natasha from reducing her tax liability by voluntarily assigning her income to another taxpayer?
a. The constructive receipt doctrine
b. The economic benefit doctrine
c. The fruit-of-the-tree doctrine
d. None of the above
7. During 2014, Fredrick was supported by his three wealthy CPA daughters, in the following percentages:
Flo: 25.0%
Lisa: 31.0%
Parveen: 11.0%
Which daughter is UNABLE to claim Fredrick as a dependent, even if a multiple support agreement is in place and the other daughters agree NOT to claim Fredrick as a dependent?
a. Flo
b. Lisa
c. Parveen
d. Each daughter would be eligible to claim Fredrick as a dependent
8. On January 1, 2014, Peter signed a THREE year lease to rent office space from Paula. The lease commenced immediately on January 1, 2014. During 2014, Peter paid Paula, $24,000 for the first year's rent, $2,000 for the last month's rent, and $2,000 as a security deposit. Peter and Paula agree that the security deposit will NOT be returned by Paula at the end of the lease. How much gross income should Paula report for 2014 as a result of these items?
a. $72,000
b. $28,000
c. $26,000
d. $24,000
9. What is Andrew's taxable income for 2014? Assume Andrew is 54 years old and is single and has no dependents. Assume further that Andrew's 2014 AGI is $55,000 and that he has no itemized deductions.
a. $55,000
b. $51,050
c. $48,800
d. $44,850
10. Markus, a single taxpayer, had 2014 wages of $72,000 from his job at Big Company, Inc. What is Markus's AGI if he has the following (and only the following) additional items in 2014?
- Itemized deductions of $15,000
- Exemption amount of $3,950
- Alimony of $10,000 received by Markus (from his former spouse, Maria)
- Business income of $10,000 from Markus's sole proprietorship
Ignore any deduction that may relate to self-employment taxes.
a. $92,000
b. $88,000
c. $73,050
d. $72,000