Chapter 3 - Computing the Tax

CHAPTER 3--COMPUTING THE TAX 3 copy Key

67. | In terms of the tax formula applicable to individual taxpayers, which, if any, of the following statements is correct?

A.  | In arriving at taxable income, a taxpayer must choose between the standard deduction and deductions from AGI. |

B.  | In arriving at AGI, personal and dependency exemptions must be subtracted from gross income. |

C.  | In arriving at taxable income, a taxpayer must choose between the standard deduction and claiming personal and dependency exemptions. |

D.  | The formula does not apply if a taxpayer elects to claim the standard deduction. |

E.  | None of the above. |

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68. | In terms of the tax formula applicable to individual taxpayers, which, if any, of the following statements is correct? 

  A.  | In arriving at AGI, a taxpayer must elect between claiming deductions for AGI and deductions from AGI. |

B.  | In arriving at taxable income, a taxpayer must elect between claiming deductions for AGI and deductions from AGI. |

C.  | If a taxpayer has deductions for AGI, the standard deduction is not available. |

D.  | In arriving at taxable income, a taxpayer must elect between deductions for AGI and the standard deduction. |

E.  | None of the above. |

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69. | Regarding the tax formula and its relationship to Form 1040, which, if any, of the following statements is correct? 

  A.  | Most exclusions from gross income are reported on page 2 of Form 1040. |

B.  | An “above the line deduction” refers to a deduction from AGI. |

C.  | A “page 1 deduction” refers to a deduction for AGI. |

D.  | The taxable income (TI) amount appears both at the bottom of page 1 and at the top of page 2 of Form 1040. |

E.  | None of the above. |

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70. | Which of the following items, if any, is deductible? 

  A.  | Parking expenses incurred in connection with jury duty—taxpayer is a dentist. |

B.  | Substantiated gambling losses (not in excess of gambling winnings) from...