Chapter 1 MC Accounting Homework

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Question #1

Dorit, a single taxpayer, has a long-term capital loss of $7,000 on the sale of bonds in 2020 and no other capital gains or losses. Her taxable income without this transaction is $43,000. What is her taxable income considering this capital loss?

A $55,000

B $36,000

C Some other amount.

D $40,000

E $43,000

Question #2

Alex purchased a rental house 4 years ago for $270,000. Her depreciation at the time of the sale is $40,000. Due to a decrease in real estate prices, she sells the house for only $240,000 in 2020. What is her gain or loss for tax purposes?

A $0

B $10,000 loss.

C $25,000 gain.

D $35,000 loss.

E $10,000 gain.

Question #3

Joyce purchased General Electric stock 4 years ago for $10,000. In the current year, she sells the stock for $25,000. What is Joyce’s gain or loss?

A $15,000 long-term gain.

B $15,000 ordinary loss.

C $15,000 short-term gain.

D $15,000 extraordinary gain

Question #4

Which of the following is not a capital asset to an individual taxpayer?

A Raw land held as an investment.

B Stocks.

C A 48-foot sailboat.

D All of these choices are capital assets.

E Inventory in the taxpayer’s business.

Question #5

Taxpayers who are blind get the benefit of:

A An additional amount added to their itemized deductions.

B None of these choices are correct.

C An additional amount added to their standard deduction.

D An additional exemption.

Question #6

Taxpayers who are 65 or older get the benefit of:

A An additional amount added to their standard deduction.

B None of these choices are correct.

C An additional amount added to their itemized deductions.

D An additional exemption.

Question #7

Morgan is 65 years old and single. He supports his father, who is 90 years old, blind, and has no income. What is Morgan’s standard deduction?

A $18,650

B $20,300

C $20,000

D $14,050

E $12,400

Question #8

As a married couple, Yihong and Kaylee’s EIP was $2,400. In 2020, they computed their recovery rebate credit as $2,900 due to the birth of a child in 2020. The 2020 net impact of the EIP and RRC will be to:

A increase their income.

B increase their tax liability by $500.

C decrease their tax liability by $500.

D have no impact on their tax liability.

Question #9

Which of the following taxpayers is not eligible for an economic impact payment in 2020?

A Blake, a single taxpayer with no income who is claimed as a dependent on his grandparents’ tax return.

B Savannah, a married taxpayer with no children, and has AGI of $75,000 in 2020.

C Kaylee, a 24-year old single individual (not a dependent) who did not file a tax return in either 2018 or 2019 as her income was below the filing threshold.

D Ava, a married taxpayer that had a child in 2020. Her joint AGI in 2020 was $76,000.

Question #10

Lakota and Dominique file married filing jointly and have a 13-year-old daughter. They also provide 25 percent of the support for Lakota’s 82-year-old mother, who lives in a nursing home nearby. The amount of the combined child tax credit and other dependent credit for Lakota and Dominique is:

A $2,500

B $2,000

C $1,000

D $1,500

E $0

Question #11

Yasmine and her spouse Carlos, who file married filing jointly, provide all the support for their 16-year-old son, Miguel. If Miguel qualifies as a qualifying child under the dependent rules, Yasmine and Carlos will be able to claim

A $1,000

B $2,000

C $2,500

D $500

E $0

Question #12

Kardi, age 65, and Kanye, age 62, are married with a 23-year-old daughter who lives in their home. They provide over half of their daughter’s support, and their daughter earned $4,600 this year from a part-time job. Their daughter is not a full-time student. The daughter can/cannot be claimed as a dependent because:

A She can be claimed because she lives in their household for 12 months.

B She cannot be claimed because she fails the gross income test.

C She can be claimed because she is a qualifying relative.

D She can be claimed because she is a qualifying child.

Question #13

Margaret and her sister support their mother and together provide 85 percent of their mother’s support. If Margaret provides 40 percent of her mother’s support:

A Neither Margaret nor her sister may claim their mother as a dependent.

B Both Margaret and her sister may claim their mother as a dependent.

C Her sister is the only one who can claim their mother as a dependent.

D Margaret and her sister may split the dependent status of their mother.

E Margaret may claim her mother as a dependent if her sister agrees in a multiple support agreement.

Question #14

Glenda, a single taxpayer from Kansas, paid for more than one-half of the support for her mother, Dorothy. Dorothy did not live with Glenda in Kansas, but rather has lived in a nursing home in an adjacent state since Dorothy’s husband died three years ago. Glenda’s filing status should be:

A Single

B Head of household

C Qualifying widower

D Parental dependent

E Married filing separately

Question #15

Joan, who was divorced in 2020, had filed a joint tax return with her husband in 2019. During 2020, she did not remarry and continued to maintain her home in which her five dependent children lived. In the preparation of her tax return for 2020, Joan should file as:

A A qualifying widow(er).

B None of these choices are correct.

C Married, filing separately.

D Head of household.

E A single individual.

Question #16

Ben, a single taxpayer with no dependents, is 32 years old. What is the minimum amount of income that he must have to be required to file a tax return for 2020 assuming he has no earnings from self-employment?

A $12,200

B $12,000

C None of these choices are correct.

D $12,400

E $4,200

Question #17

Ramon, a single taxpayer with no dependents, has adjusted gross income for 2020 of $98,000 and his itemized deductions total $9,000. What taxable income will Ramon show in 2020?

A $79,000

B $85,600

C $89,000

D $74,950

E $85,800

Question #18

All of the following are itemized deductions in 2020 except:

A Medical expenses.

B Charitable contributions.

C Deductible IRA contributions.

D State and local taxes.

Question #19

Which of the following is a deduction for adjusted gross income in 2020?

A Medical expenses.

B Student loan interest.

C Personal casualty losses.

D Mortgage interest.

Question #20

On which of these would capital gain income be reported?

A Schedule 2

B Schedule 1

C Form 1040

D Schedule 3

Question #21

Typical corporate income is reported on:

A Form 1065.

B Form 1120.

C Form 1040X.

D Form 1040.

Question #22

Which of the following tax forms are used by individuals in 2020?

A 1120

B 1040-SR

C 1040-EZ

D 1040A

Question #23

Which of the following recent tax changes is not scheduled to expire after 2025?

A Reduction of corporate tax rates to 21 percent

B Suspension of personal exemptions

C General lowering of individual tax rates

D Restrictions on the deduction of casualty and theft losses

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Chapter 1 MC Accounting Homework

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