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