Answered: Cindy’s husband Allen dies on March 1,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Cindy’s husband Allen dies on March 1, 2021. Cindy and Allen have no children. What is Cindy’s filing status for the 2022 and 2023 tax years?

Group of answer choices

Surviving Spouse because her spouse died during a previous tax

Single, because her spouse died during a previous tax year.

Head of Household because her spouse died during a previous tax year..

Married Filing Separately because her spouse died during a previous tax year..

Olivia is an unmarried attorney. Her friend Lana has fallen on hard times since she lost her job. Olivia allows Lana to reside with her for the entire year and provides over half of Lana’s support. Lana only earned $3,000 for the tax year. What is Olivia’s filing status?

Single, because even though Lana is a dependent, Lana is not related to Olivia.

Single, because Lana is not a qualifying child, and only taxpayers with qualifying children can claim head of household.

Head of Household, because Olivia has maintained a household for Lana for over ½ of the year.

Head of Household, because Lana is Olivia’s qualifying relative, and Olivia has maintained a home for her for over ½ the tax year.

Karen purchased 100 shares of X-Corporation Stock in 2020. X-Corporation is registered and headquartered in Colorado and is listed on the New York Stock Exchange. In 2021, X-Corporation declares and pays a dividend of $4.00 per share. What are the tax consequences for Karen?

Group of answer choices

Karen has received an eligible dividend that will be taxed at a rate of 15-20%.

Karen has received an eligible dividend that will be excluded from her gross income.

Karen has received a non-eligible dividend that will be taxed at the ordinary progressive rates.

Karen has received a non-eligible dividend that will be excluded from gross income.

Jorge has a tax liability of $2,100 in the 2021 tax year. During that year, Jorge has a tax credit worth $3,500. Which of the following is most TRUE:

Group of answer choices

Jorge will receive a tax refund of $1,400 because tax credits are always refundable.

Jorge will not receive a tax refund because tax credits are never refundable.

Jorge will receive a tax refund of $1,400 if his tax credit is refundable.

Jorge will not receive a tax refund because tax credits only affect taxable income.

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