1. Which of the following is not true of the dependency tests for the relative (non-child) dependency...
Question:
1. Which of the following is not true of the dependency tests for the relative (non-child) dependency tests?
a. Generally, a dependent’s gross income may not exceed the 2017 exemption amount adjusted for inflation ($4,300).
b. Gross income includes scholarships.
c. A child of the taxpayer, under age 24, who is a full‑time student at any time during five calendar months of the tax year is exempted from the gross income test.
d. A child of the taxpayer under age 19 is exempted from the gross income test.
e. The taxpayer must provide more than 50% of total support.
2. Mr. Smith, who is single and has adjusted gross income of $110,000 and a marginal ordinary income tax rate of 24%, had the following transactions in 2021:
Transaction Sales Price Adjusted Basis Holding Period
Sale of 500 shares of ABC $6,000 $3,500 13 months
Sale of personal furniture $3,000 $2,500 36 months
Sale of 10 shares IBM $4,000 $5,500 8 months
Sale of personal auto $9,000 $11,000 15 months
Sale of Mass. bonds $5,000 $6,000 18 months
Sale of Fidelity Fund $8,000 $6,000 9 months
The stock sales are not eligible for gain exclusion under §1202. Mr. Smith's net capital gain or loss on these transactions is:
a. $1500 LTCG taxed at 15% and $500 STCG taxed at 24%
b. $1,500 LTCG taxed at 15%; $2,500 LTCL that is 100% deductible and $2,000 STCG taxed at 24%.
c. $2,000 LTCG taxed at 15% and $500 STCG taxed at 24%
d. $3,000 LTCG taxed at 24% and $500 STCG taxed at 15%.
e. $2,500 LTCG taxed at 0%.
3. Which of the following generally has the least favorable tax rates and brackets?
a. Head of household
b. Married, filing jointly
c. Married, filing separately
d. Single
South-Western Federal Taxation 2019 Comprehensive
ISBN: 9781337703017
42th edition
Authors: David M. Maloney, William A. Raabe, William H. Hoffman, James C. Young