INCOME TAX FUNDAMENTALS, 38TH EDITION, GERALD E. W
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TEST BANK & SOLUTION MANUAL FOR INCOME TAX
FUNDAMENTALS, 38TH EDITION, GERALD E. WHITTENBURG,
MARTHA ALTUS- BULLER, STEVEN GILL A+
Chapter 1: The Individual Income Tax Return
1. A corporation is a reporting entity but not a tax-paying entity. True False
2. Partnership capital gains and losses are allocated separately to each of the partners. True
False
3. Married taxpayers may double their standard deduction amount by filing separate returns.
True False
4. An item is not included in gross income unless the tax law specifies that the item is
subject to taxation.
True False
5. For taxpayers who do not itemize deductions, the standard deduction amount is
subtracted from the taxpayer's adjusted gross income.
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True False
6. A taxpayer with self-employment income of $600 must file a tax return. True False
7. A dependent child with earned income in excess of the available standard deduction
amount must file a tax return.
True False
8. A single taxpayer, who is not blind and who is under age 65, with income of $8,750 must
file a tax return.
9. If a taxpayer is due a refund, it will be mailed to the taxpayer regardless of whether he or
she files a tax return.
True False
10. Taxpayers with self-employment income of $400 or more must file a tax return. True
False
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11. If your spouse dies during the tax year and you do not remarry, you must file as single for
the year of death.
True False
12. Taxpayers who do not qualify for married, head of household, or qualifying widow or
widower filing status must file as single.
True False
13. If an unmarried taxpayer paid more than half the cost of keeping a home which is the
principal place of residence of a nephew, who is not her dependent, she may use the head of
household filing status.
True False
14. The maximum official individual income tax rate for 2012 is 35 percent. True False
15. All taxpayers may use the tax rate schedule to determine their tax liability. True False
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16. The head of household tax rates are higher than the rates for a single taxpayer. True
False
17. Most states are community property states.
18. If taxpayers are married and living together at the end of the year, they must file a joint
tax return.
True False
19. A taxpayer who maintains a household with an unmarried child may qualify to file as
head of household even if the child is not the taxpayer's dependent.
True False
20. A married person with a dependent child may choose to file as head of household if it
reduces his or her tax liability.
True False
21. A taxpayer who is living alone and is legally separated from his or her spouse under a
separate maintenance decree at year-end should file as single.
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