A married couple files a joint return but is subsequently unable to pay the taxes. The spouse not responsible for incurring the liability can reduce his or her personal liability through which of the following?
A. Innocent Spouse Relief
B. Separation of Liability Relief
C. Tax Court Review Relief
D. Equitable Treatment Relief
Innocent spouse relief.
Answer (A) is correct.
Innocent spouse relief requires that there was a joint return filed, that the return had an understatement of tax due to the taxpayer’s spouse, that the taxpayer can establish ignorance of the understatement, and that the tax would be unfair given the circumstances.
Separation of liability relief.
Answer (B) is incorrect.
Separation of liability relief only applies to joint filers who are currently divorced, widowed, or legally separated or have not lived together for the 12 months prior to the date relief was requested.
C. Tax Court review relief.
Answer (C) is incorrect.
There is no such thing as Tax Court review relief.
D. Equitable treatment relief.
Answer (D) is incorrect.
Equitable relief only applies to joint filers who do not qualify for innocent spouse relief or separation of liability relief and married couples who file separate returns in community property states.
Mr. Todd, who is 43 years old, has lived apart from his wife since May 2024. For 2024, his two children, whom he can claim as dependents, lived with him the entire year, and he paid the entire cost of maintaining the household. Assuming that Mr. Todd cannot qualify to file a joint return for 2024, he must, nevertheless, file a return if his gross income is at least
A. $5
B. $29,200
C. $14,600
D. $21,900
Answer (A) is incorrect.
The amount of $5 is the special threshold for MFS taxpayers.
Answer (B) is incorrect.
The amount of $29,200 is the standard deduction for MFJ taxpayers.
Answer (C) is incorrect.
The amount of $14,600 is the standard deduction for single individuals.
Answer (D) is correct.
Generally, a taxpayer must file a tax return if the taxpayer’s gross income equals or exceeds his or her standard deduction [Sec. 6012(a)]. Standard deductions in 2024 are $29,200 for married filing jointly, $21,900 for heads of household, and $14,600 for single individuals (Publication 501). A taxpayer who has two children and files as head of household must file a return if his or her gross income equals or exceeds $21,900.
In meeting the “gross income” test for claiming his father as a dependent, a taxpayer had to consider the income received by his father. This income included gross rents of $4,000 (expenses were $2,000), mutual fund municipal bond interest of $1,200, corporate bond interest of $1,000, dividends of $1,400, wages of $2,000, and Social Security of $4,000. What is the father’s gross income for dependency test purposes?
Answer (A) is incorrect.
This amount only includes wages. Other items should also be included.
Answer (B) is correct.
Gross income used for the test of dependency is defined in Sec. 61 and Publication 501. It is all income except that specifically excluded in the code. Some of the exclusions are listed in Sec. 101-139. A few examples of income that are excluded from gross income are nontaxable scholarships, tax-exempt bond interest, and nontaxable Social Security benefits. The father does not qualify as a dependent as he has more than $5,050 in gross income ($4,000 rent + $1,000 corporate bond interest + $1,400 dividends + $2,000 wages).
Answer (C) is incorrect.
This amount also includes tax-exempt bond interest, which should not be included.
Answer (D) is incorrect.
This amount includes the tax-exempt bond interest, Social Security benefits, and expenses from the rent income. The former two are not part of gross income. The latter is a part of adjusted gross income deductions.
For 2024, Mr. and Mrs. Garcia filed a joint return. During 2024, they provided more than 50% of the support for the following individuals, all of whom are U.S. citizens. Mr. Garcia’s Aunt Maria, age 63, lived with them all year and had no income. Aunt Maria’s single daughter, Julia, lived with the Garcias all year. Julia worked and earned $2,000, her only income for the year. The Garcias’ son, age 21, was a full-time student for 9 months. During the summer, he worked and earned $5,500. How many dependents may Mr. and Mrs. Garcia claim on their 2024 tax return?
Answer (A) is incorrect.
The couple is entitled to claim the aunt, Julia, and their son.
Answer (B) is incorrect.
The couple is entitled to a total of three dependents.
Answer (C) is correct.
To qualify as a dependent, the taxpayer must provide over 50% of the support of a U.S. citizen who meets certain relationship tests stated in Sec. 152(a). Each of the individuals listed qualifies under the relationship test, including Julia because she was a member of the household for the entire year (not because she is Mr. and Mrs. Garcia’s cousin). Section 151(c) imposes additional limitations on the dependency claim. These limitations include a limit on gross income for each dependent of less than the statutory amount ($5,050), unless (s)he is a child of the taxpayer and is under 19 years of age or a full-time student under 24 years of age.
Mr. and Mrs. Garcia are entitled to claim Aunt Maria; Julia, because she did not earn more than the allowed amount; and their son, because he is a full-time student under 24 years of age (Publication 501).
Answer (D) is incorrect.
The couple cannot claim themselves as dependents.
Ada lived with her son Robert and his wife Barbara. Ada’s only source of income was a $1,500 fully taxable pension, which she spent on clothes and recreation. Robert and Barbara paid Ada’s medical and drug expenses of $600 for the year. Robert and Barbara’s total food expense for the household was $6,000. The fair rental value of the lodging provided Ada was $1,200 for the year, based on the cost of similar room facilities. What was Ada’s total support for the year for purposes of determining whether Robert and Barbara can claim Ada as a dependent?
Answer (A) is incorrect.
A portion of the food expense and the money spent on clothes and recreation are included in total support.
Answer (B) is incorrect.
A proportionate share of expenses incurred in supporting the entire household is included as total support.
Answer (C) is correct.
A taxpayer must furnish more than one-half of the total support provided during the calendar year before claiming a dependent under the qualifying relative rules (Reg. 1.152-1 and Publication 501). Total support is determined on a yearly basis and is the sum of (1) the fair rental value of lodging, (2) the costs of all items of expense paid out directly by or for the benefit of the dependent, and (3) a proportionate share of expenses incurred in supporting the whole household. Ada’s total support for the year is $5,300 [$600 medical expenses + $1,200 lodging + 1/3 ($6,000) + $1,500 clothes/recreation].
Answer (D) is incorrect.
A correct answer is listed.
How is the net unearned income of a dependent under the age of 19 taxed?
A. It is taxed to the dependent at the dependent’s parents’ marginal rate.
B. It is taxed to the dependent at 30%.
C. It is taxed to the taxpayer who claimed the dependent at the dependent’s parents’ marginal rate.
D. Net income is not taxed unless it is earned.
Answer (A) is correct.
Net unearned income (NUI) of a dependent under 19 (under 24 for full-time students) at the close of the tax year is taxed to the dependent at the dependent’s parents’ marginal rate.
Answer (B) is incorrect.
The net unearned income of a dependent is taxed at the dependent’s parents’ marginal rate.
Answer (C) is incorrect.
Net unearned income is taxed to the dependent.
answer (D) is incorrect.
Net unearned income is taxed.
Bryce, who is 44 years old, has lived apart from his wife since May 2024. For 2024, his three children, whom he can claim as dependents, lived with him the entire year, and he paid the entire cost of maintaining the household. Assuming that Bryce cannot qualify to file a joint return for 2024, he must, nevertheless, file a return if his gross income is at least:
A. $14,600
B. $21,900
C. $5,050
D. $29,200
Answer (A) is incorrect.
Bryce will have to file if his gross income equals or exceeds the amount of his standard deduction. Bryce qualifies as head of household.
Answer (B) is correct.
Generally, a taxpayer must file a tax return if the taxpayer’s gross income equals or exceeds his or her standard deduction [Pub. 501 and Sec. 6012(a)]. Standard deductions in 2024 are $29,200 for married filing jointly, $21,900 for heads of household, $14,600 for single individuals, and $14,600 for married filing separate taxpayers. A taxpayer who has three children and files as a head of household must file a return if his or her gross income equals or exceeds $21,900.
Answer (C) is incorrect.
Bryce will have to file if his gross income equals or exceeds the amount of his standard deduction. Bryce qualifies as head of household.
Answer (D) is incorrect.
Bryce will have to file if his gross income equals or exceeds the amount of his standard deduction ($21,900). The standard deduction of $29,200 applies to married filing jointly individuals.
1) John and Linda Smith are a childless married couple with no other dependents who lived apart for all of the current year. On December 31 of the current year, they were legally separated under a decree of separate maintenance. Based on the facts, which of the following is the only filing-status choice available to them for the current year?
A. Head of household.
B. Married filing joint return.
C. Married filing separate return.
D. Single.
Answer (A) is incorrect.
They are not maintaining a home as a principal place of abode for a child or other dependent and do not qualify for head of household status.
Answer (B) is incorrect.
They are unmarried at year end.
Answer (C) is incorrect.
They are unmarried at year end.
Answer (D) is correct.
The determination of whether an individual is married is made as of the close of the taxable year, so John and Linda are both single for the current year (Publication 17). Couples under a separate maintenance agreement are not considered married.
Which of the following is NOT a requirement that must be met in determining whether a married taxpayer is considered unmarried for head of household filing-status purposes?
A. An individual must file a separate return.
B. An individual’s spouse must not have lived in their home for the last 6 months of the tax year.
C. An individual must pay more than one-half the cost of keeping up a home for the tax year.
D. An individual’s home must be, for the entire year, the main home of his or her child, stepchild, or qualified foster child whom (s)he or the noncustodial parent can properly claim as a dependent.
A. An individual must file a separate return.
Answer (A) is incorrect. Original answer
This is a requirement for the married taxpayer to be considered unmarried for the purpose of determining head of household filing status.
B. An individual’s spouse must not have lived in their home for the last 6 months of the tax year.
Answer (B) is incorrect.
This is a requirement for the married taxpayer to be considered unmarried for the purpose of determining head of household filing status.
C. An individual must pay more than one-half the cost of keeping up a home for the tax year.
Answer (C) is incorrect.
This is a requirement for the married taxpayer to be considered unmarried for the purpose of determining head of household filing status.
D. An individual’s home must be, for the entire year, the main home of his or her child, stepchild, or qualified foster child whom (s)he or the noncustodial parent can properly claim as a dependent.
Answer (D) is correct.
In determining if a taxpayer qualifies for head of household filing status, the married taxpayer is considered unmarried if all the following requirements are met:
The taxpayer filed a separate return.
The taxpayer paid more than half the cost of keeping up the home for the tax year.
The taxpayer’s spouse did not live in the home during the last 6 months of the tax year.
The home was, or more than half the year, the main home of the taxpayer’s child, stepchild, or adopted child whom the taxpayer or the noncustodial parent can properly claim as a dependent.
The taxpayer must be able to claim the child as a dependent.
Therefore, this answer is correct because the requirement is that the home be the main home of the child, stepchild, or qualified foster child for more than half the year, not the entire year [Publication 17 and Sec. 2(b)].
A husband and wife can file a joint return even if
A. They were divorced before the end of the tax year.
B. The spouses have different tax years, provided that both spouses are alive at the end of the year.
C. The spouses have different accounting methods.
D. Either spouse was a nonresident alien at any time during the tax year, provided that at least one spouse makes the proper election.
A. They were divorced before the end of the tax year.
Answer (A) is incorrect.
Regulation Section 1.6013-4 states that spouses must be married on the last day of the tax year to be allowed to file a joint return.
B. The spouses have different tax years, provided that both spouses are alive at the end of the year.
Answer (B) is incorrect.
Section 6013(a)(2) disallows spouses with different tax years from filing a joint return.
C. The spouses have different accounting methods.
Answer (C) is correct.
There is no provision disallowing spouses to file a joint return because they have different accounting methods (Publication 17).
D. Either spouse was a nonresident alien at any time during the tax year, provided that at least one spouse makes the proper election.
Answer (D) is incorrect. Orignal Answer
Section 6013(a)(1) provides that neither spouse can be a nonresident alien during the tax year and still file a joint return. An exception applies if the nonresident alien spouse is married to a U.S. citizen or resident alien at year end and both spouses elect to have the nonresident alien treated as a resident alien [Sec. 6013(g)].
All of the following are conditions for a taxpayer’s qualifying for innocent spouse relief EXCEPT
A. Establishment of the fact that the taxpayer did not know and had no reason to know that there was an understatement of tax.
B. The couple was divorced, widowed, or legally separated or did not live together for the 12 months prior to the innocence claim.
C. It would be unfair to hold the taxpayer liable for the understatement of tax, taking into account the facts of the case.
D. The return was jointly filed and had an understatement of tax due to erroneous items of the taxpayer’s spouse (or former spouse).
A. Establishment of the fact that the taxpayer did not know and had no reason to know that there was an understatement of tax.
Answer (A) is incorrect.
This is one of the conditions for filing for innocent spouse relief.
B. The couple was divorced, widowed, or legally separated or did not live together for the 12 months prior to the innocence claim.
Answer (B) is correct.
This is not one of the conditions for filing for innocent spouse relief. This is a condition for separation of liability relief.
C. It would be unfair to hold the taxpayer liable for the understatement of tax, taking into account the facts of the case.
Answer (C) is incorrect. original answer
This is one of the conditions for filing for innocent spouse relief.
D. The return was jointly filed and had an understatement of tax due to erroneous items of the taxpayer’s spouse (or former spouse).
Answer (D) is incorrect.
This is one of the conditions for filing for innocent spouse relief.
For federal income tax purposes, an individual is considered married for the whole year in all of the following situations EXCEPT
A. The individuals are married with no dependents and lived apart the whole year but are not legally separated under a decree of divorce or separate maintenance.
B. Lived with another individual over half the year as husband and wife in a state that does not recognize a common-law marriage.
C. If on the last day of the tax year the individual is separated under an interlocutory (not final) decree of divorce.
D. If on the last day of the tax year the individual has not remarried after being widowed during the tax year.
A. The individuals are married with no dependents and lived apart the whole year but are not legally separated under a decree of divorce or separate maintenance.
Answer (A) is incorrect.
This is a circumstance under which a taxpayer would be treated as having been married for the entire tax year.
B. Lived with another individual over half the year as husband and wife in a state that does not recognize a common-law marriage.
Answer (B) is correct.
For federal income tax purposes, an individual is considered to have been married for the entire year if on the last day of the tax year the taxpayer is living together in a common-law marriage that is recognized in the state where the taxpayer is currently living or the state where the common-law marriage began. A taxpayer who lived with another individual over half the year as husband and wife in a state not recognizing common-law marriage is not considered to be married for federal income tax purposes.
C. If on the last day of the tax year the individual is separated under an interlocutory (not final) decree of divorce.
Answer (C) is incorrect.
This is a circumstance under which a taxpayer would be treated as having been married for the entire tax year.
D. If on the last day of the tax year the individual has not remarried after being widowed during the tax year.
Answer (D) is incorrect.
This is a circumstance under which a taxpayer would be treated as having been married for the entire tax year.
To determine whether a married taxpayer is considered unmarried for head of household filing-status purposes, how long must the taxpayer’s home be the main home of his or her child, stepchild, or qualified foster child whom (s)he or the noncustodial parent can properly claim as a dependent
A. Half of the Year
B. The entire Year
A. is correct - Half of the Year - the requirement is that the home be the main home of the child, stepchild, or qualified foster child for more than half the year, not the entire year [Publication 17 and Sec. 2(b)].
To pass the gross income tests to be considered a qualifying r relative, would gross income of the potential qualifying relative include gross or net rental or social security?
Gross rental income would be included in gross income for purposes of the gross income test for the qualifying residence test.
Non-taxable income such as social security and muni bond interest would not be included in gross income for purposes of the gross income test for the qualifying residence test.
If a couple is legally separated on December 31of the tax year, under a decree of separate maintenance, which of the following is the correct filing-status available to them for the current year?
A. Head of household.
B. Married filing joint return.
C. Married filing separate return.
D. Single.
Answer (A) - Head of Household is incorrect.
They are not maintaining a home as a principal place of abode for a child or other dependent and do not qualify for head of household status.
Answer (B) - Married filing joint- is incorrect.
They are unmarried at year end.
Answer (C) - Married filing separate is incorrect.
They are unmarried at year end.
Answer (D)- Single is correct.
The determination of whether an individual is married is made as of the close of the taxable year and at the end of the tax year the couple was separated under a decree of separate maintenance. Per Publication 17 couples under a separate maintenance agreement are not considered married. So both people must file single for the current year.
If a person who receives social security and uses it for food, recreation, clothes or other similar items, is the amount of social security spent on those items included in determining the person’s total support for purposes of the “qualifying relative” test?
A. Yes
B. No
A. Yes is correct. Even if an item of support is purchased using money from a source other than the taxpayer or the potential “qualifying relative”, such as by using social security, charity, or a person gift from a third party, it is still included in determining the total support needed to support a person for purposes of the “qualifying relative” test.
However, if social security or other income is received, but not spent on support is received, it is not considered as support provided by that person that counts toward their support.
The Logic of the Support Test
The support test is based on money spent for necessities, not merely money received.
Total Support: This is the total dollar amount spent on all items of support (food, lodging, clothing, etc.) for the person from all sources (the dependent’s own money, your money, other relatives’ money, government funds, etc.).
Dependent’s Contribution to Support: The only portion of the dependent’s own funds (income, savings, loans, etc.) that is counted in the total support calculation is the amount they actually spend on their own support.
If a person receives money (like a paycheck or a gift) but saves or invests it, that unspent amount is not included in their total support.
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Filing Requirements16
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Gross Inc3
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Gross Income II: Interest, Securities, and Decedent7
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Individual Credits5
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Business Deductions3
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Above the Line Deductions (for AGI)9
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Itemized Deductions11
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QBI deduction, AMT, and Other Taxes36
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Tax Credits and Payments22
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Cap Gains & Losses/ Basis & Dispositions19
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Sec 1244 stock & Sec 1202 stock18
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1031 Exchange & 121 Sale of home7
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IRAs19
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Gift Tax11
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Gleim Review Test Questions57
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Gleim Review Test Questions - Filing Requirements & Dependents9
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Gleim Review Test Questions - Gross Income5
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Glaim Review Test Questions -Interest, Securities, and Decedent5
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Installment Sales2
