27. In general, the taxpayer must report any taxable amount of a canceled debt as which of the following? A. Property settlement B. Ordinary income C. Capital gains D. Like-kind exchange 28. Generally, Form 1099-K report payments to a taxpayer's trade or business. As such, the income for sole proprietors is reported on which schedule as gross receipts subject to the self-employment tax? A. Schedule 1 B. Schedule 2 C. Schedule C D. Schedule H Lesson 3 29. All of the following are requirements to claim head of household filing status except: A. The taxpayer's parent must live in the taxpayer's home at least 6 months B. The taxpayer is unmarried or considered unmarried on the last day of the year C. A qualifying person lived with the taxpayer over half the year D. The taxpayer's spouse did not live in the taxpayer's home during the last 6 months of the tax year 30. Aidan is unmarried. His mother, for whom he can claim as a dependent, lived in an apartment by herself. She died on September 2, 2021. The cost of the upkeep of her apartment for the year until her death was $6,000. Aidan and his brother both paid support and their mother had no income. Aidan would qualify to file as head of household if he paid what amount of his mother's support? A. $1,000 B. $1,500 C. $2,000 D. $4,000 31. Henry Wright retired this year after 30 years of civil service. He and his wife were domiciled in a community property state during the past 15 years. If Mr. Wright receives $1,000 a month in retirement pay, what amount of the retirement pay is considered community income? A. $250 B. $500 C. $750 D. $1,000 MCOVA 32. At the time Sherry signed her joint return, she knew that her spouse did not report $5,000 of gambling winnings. The IRS examined the tax return several months after she filed it and determined that her spouse's unreported gambling winnings were actually $25,000. Sherry established that she did not know about, and had no reason to know about, the additional $20,000 because of the way her spouse handled gambling winnings. If Sherry meets the other requirements, what amount of the understated income will qualify for innocent spouse relief? A. $2,500 B. $5,000 C. $10,000 D. $20,000 33. State law governs whether a taxpayer is married or legally separated under a divorce or separate maintenance: decree. In 2021, a calendar-year taxpayer is unmarried for the whole year if he or she has obtained a final decree of divorce or separate maintenance by which date? A. January 1, 2021 B. April 15, 2021 C. October 15, 2021 D. December 31, 2021