In Preparing His 2011 Federal Income Tax Return,Sam,who Is Not

question 104

Multiple Choice

In preparing his 2011 Federal income tax return,Sam,who is not married and using single filing status,incorrectly claimed alimony payments of $12,000 as an itemized deduction (rather than as a deduction for AGI) .Sam's AGI is $60,000 and itemized deductions (which consist of the alimony,property taxes,and mortgage interest) are $20,000.Which of the following statements is correct?

• A) The error will result in taxable income being overstated.
• B) The error will result in taxable income being understated.
• C) The error could result in either taxable income being overstated or understated.
• D) The error will have no effect on taxable income.
• E) None of the above.

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Definitions:

Cyanosis

A bluish discoloration of the skin resulting from poor circulation or inadequate oxygenation of the blood.

Hyperpnea

An increase in depth and rate of breathing, often due to increased demand for oxygen by body tissues.

Specific Gravity

A measure of the density of a substance compared to the density of water at a specified temperature.

Urinometer

A device used to measure the specific gravity of urine, an indicator of hydration and kidney function.