see attached file for a hand full of tax multiple choice questions

Assume a tax system with a tax of $1,000 on taxable income of $10,000 and a $1,500 tax on taxable income of $20,000. Is the tax rate system: a. None of the above b. Progressive c. Regressive d. Proportional Amy makes the following gifts in the year 2016: $25,000 cash gift to her husband: a. $25,000 is taxable because you cannot gift money to your spouse b. Only $11,000 is taxed due to the $14,000 annual gift exclusion c. None is taxable due to $14,000 annual gift exclusion and $11,000 marital deduction d. None is taxable as money transferred to a spouse is never subject to the gift tax Amy makes the following gifts in the year 2016: $15,000 cash contribution to the Denver Rescue Mission a. $15,000 is taxable as the Denver Rescue Mission is not a charity b. $15,000 is non-taxable as the Denver Rescue Mission is a charity c. The $15,000 donation will be limited to 30% of AGI d. The $15,000 is a FOR AGI deduction Amy makes the following gifts in the year 2016: Gift of a personal automobile valued at $40,000 to her adult son a. $40,000 is taxable because you cannot gift money to your child b. Only $26,000 is taxed due to the $14,000 annual gift exclusion c. None is taxable due to $14,000 annual gift exclusion and $26,000 marital deduction d. None is taxable s money transferred to a child is never taxable Determine Betty's adjusted gross income for the year given the following information: Salary: $78,000 Child care credit: $1,000 Personal and Dependency Exemptions: $12,000 Investment interest: $4,000 IRA contribution: $5,500 Municipal bond interest: $500 Federal income taxes withheld: $6,000 Itemized Deductions: $15,300 a. $82,500 b. $82,000 c. $76,500 d. $77,000 Determine Betty's taxable income for the year given the following information: Salary: $78,000 Child care credit: $1,000 Personal and Dependency Exemptions: $12,000 Investment interest: $4,000 IRA contribution: $5,500 Municipal bond interest: $500 Federal income taxes withheld: $6,000 Itemized Deductions: $15,300 a. $55,200 b. $54,700 c. $49,700 d. $49,200 In 2016, Joan is single and a homeowner who incurs property taxes on her home of $2,000, makes charitable contributions of $500, and pays mortgage interest of $6,000. Joan's adjusted gross income is $32,000. What is her taxable income? a. $19,450 b. $23,500 c. $32,000 d. $25,700 Remember the facts from the last question: In 2016, Joan is single and a homeowner who incurs property taxes on her home of $2,000, makes charitable contributions of $500, and pays mortgage interest of $6,000. Joan's adjusted gross income is $32,000. Assume the same facts as above, but Joan is not a homeowner, so she has no property tax or mortgage interest. Instead, she pays rent of $800 per month for her apartment. What is her taxable income now? a. $21,900 b. $17,850 c. $25,700 d. $21,650 Jesse supports three people, all of whom have gross income of less than $4,050; Tina, an unrelated child who lives with him; his cousin Judy, who lives in another state; and his daughter Vicki, who lives in her own home. Assume all other tests not mentioned are met. How many dependency exemptions, if any, may Jesse claim? a. 0 b. 1 c. 2 d. 3 Amy and Chris have three children and are unclear whether they can claim their children as dependents. Assume Amy and Chris provide all the support not provided by the children. Information on the children is as follows: Peter, age 25, who served in the military immediately after high school, is a full-time college senior. He worked part-time earning $2,200 and provided 20% of his support. a. Peter is a qualifying child dependent because he is in college full-time b. Peter is not a dependent because he fails the age test c. Peter is a qualifying relative dependent because he meets the qualifying tests d. Peter is not a qualifying relative because he fails the gross income test Amy and Chris have three children and are unclear whether they can claim their children as dependents. Assume Amy and Chris provide all the support not provided by the children. Information on the children is as follows: Mark, age 22, graduated from college in May (he was a full-time student for five months of the year), and accepted a job in June. He lived with his parents for the entire year, earned $28,000, and provided 70% of his support. a. Mark is a dependent child because he was a full-time student, meets the age test and meets the residency test b. Mark is a dependent relative because he meets the residency test c. Mark is not a dependent relative because he fails the age test d. Mark is not a dependent because he fails both the gross income and support tests. In December 2016, Buddy rents an apartment to Gary. Buddy receives the first and last months' rent of $1,200 plus a security deposit of $500. How much income does Buddy, a cash basis taxpayer, report in 2016? a. $0 b. $1,100 c. $1,200 d. $1,700 Sherlock retired last year due to a lay-off. During the current year, he receives $10,000 in Social Security benefits. In addition, he receives $6,000 in cash dividends on stocks that he owned, $8,000 in interest on tax-exempt bonds and $11,000 in unemployment compensation. Assuming that Sherlock is single, how much of his social security benefits are taxable? a. $0 b. $2,500 c. $5,000 d. $8,500 Cooper was physically injured in a sailboat accident and received $100,000 in punitive damages. The entire $100,000 is taxable. a. True b. False Alice bought a small table at a garage sale for $100. While cleaning it she discovered a nameplate on the bottom. It actually belonged to Ronald Reagan and had a FMV of $1,500. She also found a letter from George H.W. Bush to Reagan that was wedged under the drawer in the table. This letter had a FMV of $300. a. $1,800 is currently taxable because both the table and the note are considered a \"treasure trove" b. $1,700 is currently taxable because both the table and the note are considered a \"treasure trove\