1. Filing status

Question 1

Filing status: single – define

Answer 1

at end of year you are unmarried or legally separated

Question 2

Filing status: joint returns – EOY test

Answer 2

1. married at EOY
2. living together as legally recognized common law marriage
3. married and living apart - not legally separated or divorced

cannot be divorced at EOY, if one dies joint can still be filed

Question 3

Filing status: married filing separately

Answer 3

1. married taxpayer may file separate return if only one spouse has income for year
   2.in separate property state, married filing separate must report income, credits/deductions on their own individual tax returns
2. in community property state, most of income, deductions, credits etc are split 50/50

Question 4

Filing status: Qualifying Widow(er) with dependent child

Answer 4

For 2 years after death:
1. joint for 2 years unless remarried
2. if remarried, living spouse files joint or separate with new spouse
Principal residence for dependent child:
1. Must pay over 1/2 of maintaining household where child lives
2. Dependent child must qualify as child (adopted ok, not foster)
3. or stepchild of surviving spouse

Question 5

Filing status: Head of Household

Answer 5

1. certain HOH pays lower taxes
2. lower taxes because:
   a. larger standard deduction
   b. wider tax brackets

Question 6

HOH (Head of Household) conditions:

Answer 6

to qualify for HOH:
1. unmarried, legally separated, or married living apart from Jul-Dec.
2. not qualifying widower
3. not resident alien
4. household maintained over 6 mo. with qualifying dependent:
a. dependent child
b. parent - not required to live with taxpayer
c. relative (must live with taxpayer)

Question 7

HOH Qualifying Child requirements:

Answer 7

-child
-stepchild
-legally adopted child
-foster child
-brother or sister
-descendant of above
-father or mother (not req to live with taxpayer)
-maintain 50% or more of upkeep of home:
1. rent
2. mortgage interest
3. property taxes
4. insurance
5. utilities
6. repairs
7. food consumed in home
- dependent relatives (must live with taxpayer)
- grandparents, brothers, sisters, aunts, uncles, nephews, and nieces, stepparents, parents in law, SIL, BIL
- dependent relative (not mom and dad) and must live with taxpayer
- DO NOT include cousins, foster parents, or unrelated dependents

Question 8

filing status for widow/widower and dependent child

Answer 8

must be principal residence for dependent child for entire year

Question 9

filing status for head of household and qualifying person

Answer 9

must be principal residence for more than 6 months.

Question 10

Realization

Answer 10

requires the accrual or receipt of cash property or services or change in the form or the nature of the investment (sale or exchange)

Question 11

Recognition

Answer 11

Means that the realized gain must be included on the tax return and cannot be excluded or deferred.