Western Federal Taxation Chapter 3

The abandoned spouse provision enables a married taxpayer with a dependent child whose spouse did not live in the taxpayer’s home during the last six months of the tax year to file as a head of household rather than as married filing separately.

A tax credit based solely on the number of qualifying children under age 17. The maximum credit available is $1,000 per child through 2010. A qualifying child must be claimed as a dependent on a parent’s tax return in order to qualify for the credit

special type of capital asset, gain from which is taxed at a max rate of 28% if the holding period is more than one year. Examples include art, rugs, antiques, gems, metals, stamps, some coins and bullion, and alcoholic beverages held for investment.

The tax law provides an exemption for each individual taxpayer and an additional exemption for the taxpayer’s spouse if a joint return is filed. An individual may also claim a dependency exemption for each dependent, provided certain tests are met

electronic filing of a tax ret. filing is either direct or indirect. if direct, the taxpayer goes online using a computer and tax return preparation software. Indirect filing is when a taxpayer uses auth IRS e-file prov. The prov often is the tax ret prep

unmarried ind who maint a household for another and satisf cert cond set in § 2(b). status enables taxpayer to use set of ind tax rate that are lower than those appl to other unmarried ind but higher than app to surv spouse and married per filing jointly

Personal and employee expenditures allowed by the Code as deductions from adjusted gross income. Examples include certain medical expenses, interest on home mortgages, state income taxes, and charitable contributions.

Passive inc, such as int and div, that is recog by a child under age 19 (or under age 24 if a full-time stud) is taxed to them at rates that would have appl had the inc been incur by child’s parents, generally to the extent that the income exceeds $1,900

To qual for a dep exemp, the support test must be satisfied; req that over 50% of support of the pot dep be prov by the taxpayer. Where no 1 person prov more than 50% of support, a mult support aggre enables taxpayer to qual for the depend exemption. A

The tax law provides an exemption for each individual taxpayer and an additional exemption for the taxpayer’s spouse if a joint return is filed. An individual may also claim a dependency exemption for each dependent, provided certain tests are met.

An individual who, as to the taxpayer, satisfies the relationship, abode, and age tests. To be claimed as a dependent, such individual must also meet the citizenship and joint return tests and not be self-supporting. §§ 152(a)(1) and (c).

An individual who, as to the taxpayer, satisfies the relationship, gross income, support, citizenship, and joint return tests. Such an individual can be claimed as a dependent of the taxpayer. §§ 152(a)(2) and (d).

The indiv taxpayer can either itemize deducts or take the standard deduction. The amount of the standard deduction depends on the taxpayer’s filing status (single, head of household, married filing jointly, surviving spouse, or married filing separately)

When a husband or wife predeceases the other spouse, the survivor is known as a surviving spouse. Under certain conditions, a surviving spouse may be entitled to use the income tax rates in § for the two years after the year of death of his or her spouse.

A tax table that is provided for taxpayers with less than $100,000 of taxable income. Separate columns are provided for single taxpayers, married taxpayers filing jointly, heads of households, and married taxpayers filing separately. § 3.

Income received but not yet earned. Normally, such income is taxed when received, even for accrual basis taxpayers.