SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN: 9780357391266
Author: Nellen
Publisher: Cengage
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Bill and karen are divorced and the parents of one child who is in bill's custody. in order to
work, bill pays karen to care for the child. assuming that karen did not reside with bill, can boll
claim a deduction for the child care expenses he incurred?
In May, Jonathon left his wife Sarah. While the couple lives apart and has no contact with
each other, they were not legally divorced. Sarah found herself having to financially provide
for the couple's eleven year-old child. Sarah paid all the costs of maintaining the household.
When it is time to complete their taxes Sarah has no idea how to get in contact with Jonathon.
Considering these facts, what is Sarah's most favorable filing status?
Group of answer choices
Married Filing Jointly
Head of Household
Married Filing Separately
Qualifying Widow(er)
Single
Jennie’s grandfather paid her tuition this fall to State University (an eligible educational institution). Jennie is claimed as a dependent by her parents, but she also files her own tax return. Can Jennie claim an education credit for the tuition paid by her grandfather? What difference would it make, if any, if Jennie did not qualify as a dependent of her parents (or anyone else)?
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- Larry is married and has five children. He is worried about the stability of his current employment and does not have a lot of savings. Larry sought out financial advice and he was told to purchase a life insurance policy that provided him with total control over the lifetime benefits, just in case he becomes unemployed. Since his estate is significantly under the estate tax exclusion amount, Larry is not concerned about the policy being included in his gross estate. He plans to name his spouse as the beneficiary to ensure that she, and his children, will be adequately provided for in the event of his death. Which one of the following techniques satisfies Larry's planning objectives? A) Larry should have a life insurance policy that is owned by an irrevocable trust. B) Larry should have a life insurance policy that is owned by a revocable trust. C) Larry should purchase a life insurance policy that names his wife as the insured. D) Larry should purchase a life…arrow_forwardPaul, age 40 and single, has an 8-year-old son, Larry. Larry resides with his mother, Susan, in her home. Pursuant to the terms of their divorce, Paul properly claims Larry as a dependent on his income tax return. Paul pays child support payments to his ex-wife for the support of his child. Susan does not claim Larry as her dependent, but she does bear the economic burden of supporting the household in which they reside. What is the maximum amount of the 2020 standard deduction that Susan qualifies for? Oa. $12,400 Оb. S18,650 Oc. $20,300 а. Od. $24,800 Oe. Susan does not qualify for claiming a standard deduction. е.arrow_forwardSandy purchased a life insurance policy on her own life and made her revocable living trust the owner and beneficiary of the policy. Sandy will continue to pay the premiums on the life insurance policy. Sandy has a moderate estate, but is not concerned about owing estate tax at her death. She is married and has two children, who are both named as beneficiaries under her revocable living trust. Which of the following statements correctly identify advantages or disadvantages of Sandy's life insurance transfer? I. Sandy will not owe gift tax on the premium payments she will be making on the life insurance policy because they are not considered to be completed gifts. II. At Sandy's death, the life insurance policy will avoid probate. III. Sandy will owe gift tax for transferring the ownership of the life insurance policy to the revocable living trust. IV. Sandy has made a completed gift of the life insurance policy by placing it in the revocable living trust. A) II and III B)…arrow_forward
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