A common income-shifting strategy is to:

All of the following are tests for determining qualifying child status except the ________.

Leach, a single taxpayer, earns $60,000 in taxable income and $5,000 in interest from an investment in city of Key West bonds. Using the U.S. tax rate schedule for 2020, what is his average tax rate (rounded)?

Jellie recently was sickened by eating spoiled peanut butter. She successfully sued the manufacturer for her medical bills ($3,700), her emotional distress ($6,000—she now fears peanut butter), and punitive damages ($44,000). What amount must Jellie include in her gross income?

In June of Year 1, Jonn’s wife, Myriah, died. Jonn did not remarry during Year 1, Year 2, or Year 3. Jonn maintains the household for his dependent daughter, Tania, in Year 1, Year 2, and Year 3. Which is the most advantageous filing status for Jonn in Year 2?

Chewie is the Wookie family’s 22-year-old daughter. She is a full-time student at an out-of-state university but plans to return home when the school year ends. During the year, Chewie earned $4,000 of income working part time. Her support totaled $30,000 for the year. Of this amount, Chewie paid $7,000 with her own funds, her parents paid $14,000, and Chewie’s grandparents paid $9,000. Which of the following statements most accurately describes whether Chewie’s parents can claim her as a dependent?

If tax rates are decreasing:

All of the following are tests for determining qualifying relative status except ________.

Finn’s gross tax liability is $7,000. Finn had $2,000 of available credits and he had $4,000 of taxes withheld by his employer. What are Finn’s taxes due (or taxes refunded) with his tax return?

Anakin and Padme Skywalker have one daughter, Leia, who is 16 years old. In November of 2019, the Skywalkers took in Leia’s 16-year-old friend Phasma, who has lived with them ever since. The Skywalkers have not legally adopted Phasma but Leia often refers to Phasma as her “sister.” The Skywalkers provide all of the support for both girls, neither girl receives any income during the year, and both girls live at the Skywalkers’ residence. Which of the following statements is true regarding whom Anakin and Padme may claim as dependents for 2020?