- Which of the following is the correct procedure and result?
Answer: Lena should file Form 8379 with the joint return; the IRS will treat her as an injured spouse and refund her allocable share of the overpayment before offset.
IRC § 6402 authorizes offsets of overpayments against a taxpayer's past-due federal tax liabilities, but an injured spouse may file Form 8379 to protect his or her allocable share of a joint overpayment from the other spouse's debts. Because Lena's withholding generated the overpayment and Marcos's debt is his separate past-due tax, Lena may be an injured spouse. Choice A confuses injured-spouse relief with IRC § 6015 innocent-spouse relief, which addresses understatements on a joint return, not pre-existing debts. Choice B states the general offset rule while ignoring her protected share. Choice D is wrong because Form 1040-X is not the mechanism to allocate an original joint refund; Form 8379 is.
- Priya and Blake filed a joint return for 2024 and divorced in 2025. The IRS examined the return, and the resulting deficiency is attributable entirely to the following items: $8,000 of additional tax from Blake's unreported self-employment income; $4,500 of additional tax from the disallowance of a deduction Blake claimed on his separate farming business; and $3,500 of additional tax from a taxable IRA distribution Priya received in 2024 but did not report. Priya had no actual knowledge of Blake's items, and no assets were transferred between them. She elects relief under IRC § 6015(c). What amount of the deficiency may she be relieved from?
Answer: $12,500
IRC § 6015(c) allows a divorced taxpayer to limit liability to the portion of a deficiency allocated to that taxpayer under IRC § 6015(d), which generally allocates items as if separate returns had been filed. Blake's unreported self-employment income ($8,000) and his disallowed farming-business deduction ($4,500) are allocable to Blake, so Priya may be relieved from $12,500. The unreported IRA distribution ($3,500) is allocable to Priya because it was an item of her income, so she remains liable for that portion. Choice A ($3,500) is the portion Priya remains liable for, not the relief amount. Choice B ($8,000) omits the disallowed deduction allocated to Blake. Choice D ($16,000) would relieve Priya of her own IRA distribution item as well.
- What filing status may Gina use for 2025?
Answer: Head of household, because the qualifying surviving spouse period expired after 2024 and she has a qualifying child.
IRC § 2(a) allows qualifying surviving spouse status only for the two taxable years beginning after the year of the spouse's death. Because Gina's husband died in 2022, qualifying surviving spouse status was available for 2023 and 2024, not 2025. For 2025, she is unmarried and maintains a household for her qualifying child, so she qualifies as head of household under IRC § 2(b). Choice A ignores the two-year limit on qualifying surviving spouse status. Choice C is wrong because a joint return with a deceased spouse is for the year of death, not later years. Choice D is wrong because a dependent parent is not required for head-of-household status when there is a qualifying child.
- Which of the following is correct?
Answer: She may file a joint 2025 return with her new spouse, but she may not file a joint return with her deceased spouse.
IRC § 6013(a)(2) permits a surviving spouse to file a joint return with a deceased spouse for the year of death only if the surviving spouse has not remarried before the close of the deceased spouse's taxable year. Because Dana remarried on October 11, 2025, before December 31, 2025, she cannot file jointly with her deceased spouse; for 2025 she is married at year-end and may file a joint return with her new spouse. Choice A ignores the remarriage bar. Choice B is wrong because the survivor has no election to file jointly with the decedent once she has remarried before year-end. Choice D is wrong because being married to different spouses during the year does not make her single.
- For 2025, how are the payments treated on the payor's and the recipient's federal income tax returns?
Answer: The payor may deduct the payments as an adjustment to income, and the recipient must include them in gross income, because the instrument was executed before 2019 and the modification did not expressly elect the post-2018 rules.
Authority: IRC §§ 71 and 215 as in effect for pre-2019 instruments (see TCJA § 11051(c)); IRC § 62(a)(10). For a divorce or separation instrument executed before 2019, pre-TCJA alimony treatment continues unless a post-2018 modification expressly elects the new rules. Because the 2024 modification did not make that election, the payor deducts the payments as an adjustment to income, and the recipient includes them in gross income. Choice B reverses the transition rule by requiring an express retention of the old law. Choice C treats the payments as excludable even though the original instrument remains under the pre-2019 rules. Choice D is inconsistent: if the post-2018 rules applied, the payments would be neither deductible nor includible.
- Which of the following is correct regarding the Form 706 decision?
Answer: Form 706 should be filed to elect portability of the unused exclusion; the election must be made on a timely filed return, and no estate tax is due.
Under IRC § 2010(c)(5), the portability election must be made on a timely filed estate tax return; the DSUE amount is defined in § 2010(c)(2). Although Harold's estate has no tax due because the marital deduction reduces his taxable estate to zero, filing Form 706 is the way to elect portability, even for an estate that would not otherwise be required to file. Choice A is wrong because there is no $1,000,000 federal estate tax filing threshold for 2025 decedents. Choice C is wrong because failing to file forfeits the portability election. Choice D is wrong because the election is made on the decedent's estate tax return, not on the surviving spouse's later return.
- Mateo and Elena filed a joint return for 2025. Elena's wages had $12,500 of federal income tax withheld, and Mateo's wages had $5,500 withheld. They made no estimated tax payments. Their total tax liability after all credits was $11,000, so the return showed a $7,000 overpayment. The IRS applied the overpayment to Mateo's past-due federal tax debt. Elena qualifies as an injured spouse. Under the Form 8379 allocation, Elena's share of the joint tax liability is $6,200 and Mateo's share is $4,800. What amount may Elena recover from the overpayment?
Answer: $6,300
IRC § 6402 allows the IRS to offset a joint overpayment against a spouse's past-due federal tax, but the injured spouse may recover the portion of the overpayment attributable to that spouse's own payments. Elena's payments are the $12,500 withheld from her wages. Her allocated share of the $11,000 joint liability is $6,200. Her share of the overpayment is $12,500 − $6,200 = $6,300. The remaining $700 of the $7,000 overpayment is Mateo's allocable share and is subject to offset. Choice A ($700) is Mateo's share, not Elena's recoverable amount. Choice B ($3,500) incorrectly divides the overpayment equally. Choice D ($7,000) treats the entire overpayment as Elena's and ignores Mateo's $700 share.
- Which of the following best describes whether the wife may obtain relief under IRC § 6015(b)?
Answer: She is not eligible under § 6015(b) because she had actual knowledge of the item giving rise to the deficiency, even though she did not know the item was omitted from the return.
IRC § 6015(b)(1) governs this relief. A requesting spouse must show, among other things, that she had no actual or constructive knowledge of the item giving rise to the understatement; knowledge that the spouse received the consulting income is knowledge of that item, even if she did not realize it was omitted. Because the wife knew about the consulting work, she cannot satisfy the lack-of-knowledge requirement. Choice B is wrong because actual knowledge of the income defeats relief regardless of benefit. Choice C is wrong because it creates a community-property allocation not present in the facts. Choice D is wrong because § 6015(b) requires lack of knowledge of the understatement, not merely lack of knowledge that the tax remained unpaid.
- Which of the following is correct regarding their 2025 federal income tax return?
Answer: A joint return for the year of death includes the decedent's income through the date of death and the survivor's income for the entire year, and the executor must consent if one has been appointed.
Authority: IRC § 6013(a); Treas. Reg. § 1.6013-1(d); IRC § 691. For the year of death, a joint return may be filed by the surviving spouse if he or she has not remarried before year-end; if an executor has been appointed, the executor joins in making the return. The decedent's cash-method income is reported through the date of death, and income received after death is generally income of the estate or beneficiaries, not income on the decedent's final return. The survivor reports full-year income. Choice B incorrectly requires that no executor be appointed. Choice C misstates joint and several liability; liability on a joint return is joint and several, subject to § 6015 relief. Choice D incorrectly requires post-death estate income to be included on the final return.
- Alonzo, a cash-basis taxpayer, died on November 30, 2025, and was survived by Carmen, who had not remarried. They are filing a joint 2025 return. Before his death, Alonzo received $118,000 in wages, a $12,000 bonus, $3,200 in dividends, and $9,000 of gain from stock whose sale proceeds he received before death. After Alonzo's death, the estate received a $4,000 paycheck for wages Alonzo had earned November 16–30 and a $6,000 bonus that had been declared before his death but was not paid or made available to him; it was paid to the estate in January 2026. Alonzo's sister, as the named beneficiary of his IRA, received a $50,000 IRA distribution after his death. Carmen received $74,000 in wages during 2025 ($68,000 before Alonzo's death and $6,000 afterward). What amount is includible in gross income on their joint 2025 Form 1040?
Answer: $216,200
IRC §§ 6013(a)(2), 451(a) and 691(a). A joint return may be filed for the year of a spouse's death; it includes the decedent's income through the date of death and the surviving spouse's income for the entire year. A cash-basis decedent's final return includes only income actually or constructively received before death. Income the decedent had a right to but had not received, and that was not credited or made available to him without restriction, is income in respect of a decedent and is taxed to the estate or beneficiary that receives it. Alonzo's includible income is $118,000 + $12,000 + $3,200 + $9,000 = $142,200. Carmen's full-year wages are $74,000. The total is $142,200 + $74,000 = $216,200. The $4,000 paycheck and the $6,000 bonus were not paid or made available to Alonzo before death, so they are income in respect of a decedent reported by the estate, and the $50,000 IRA distribution is income in respect of a decedent to the sister. Choice B is correct. Choice A ($210,200) is wrong because it counts only Carmen's $68,000 earned before Alonzo's death; the surviving spouse's income for the whole year belongs on the joint return. Choice C ($226,200) is wrong because it adds the $4,000 + $6,000 = $10,000 of post-death compensation paid to the estate. Choice D ($266,200) is wrong because it adds the $50,000 IRA distribution, which is the sister's income.
- Which of the following is correct regarding the timeliness of the Form 1040-X?
Answer: The Form 1040-X is timely if filed on or before April 15, 2025, because a return filed before its due date is treated as filed on the due date for the refund limitation period.
Authority: IRC § 6511(a); IRC § 6513(a). A refund claim generally must be filed within three years from the date the return was filed or two years from the date the tax was paid, whichever is later. For a return filed before the due date, § 6513(a) treats the return as filed on the due date, and tax paid with it as paid on the due date. Here the later period is three years from April 15, 2022, so the claim is timely through April 15, 2025. Choice B ignores the deemed-filed rule. Choice C uses the extended due date although none is relevant on these facts. Choice D applies only the two-year limit and ignores the later three-year period.
- Which of the following is correct regarding his gift tax return obligations for 2025?
Answer: The gift to the daughter is an $11,000 taxable gift requiring Form 709; the gift to the wife is within the $190,000 noncitizen-spouse exclusion.
IRC § 2523(i)(2) provides a $190,000 annual exclusion for gifts to a noncitizen spouse in 2025, so the $150,000 gift to the wife is not a taxable gift. Under IRC § 2503(b), the $30,000 gift to the daughter exceeds the $19,000 per-donee exclusion, leaving an $11,000 taxable gift, and IRC § 6019 requires Form 709 for taxable gifts. Gift splitting does not apply because the wife did not consent. Choice B applies the ordinary $19,000 exclusion to the spouse. Choice C ignores the daughter's taxable gift. Choice D incorrectly treats the transfer to a noncitizen spouse as eligible for the unlimited marital deduction.
- Which of the following is correct regarding an injured spouse allocation on a joint federal income tax return?
Answer: An injured spouse who files Form 8379 with a joint return can prevent the application of the joint refund to the other spouse's past-due child support, but only for the portion of the refund allocable to the injured spouse.
Authority: IRC § 6402(c); Form 8379 instructions. An injured spouse allocation protects the requesting spouse's share of a joint refund from offset for the other spouse's debts. The IRS allocates the refund based on the spouses' separate items and offsets only the noninjured spouse's allocated share. Choice A states the rule. Choice B misstates the allocation as an equal split. Choice C misstates the timing: Form 8379 may be filed after an offset occurs. Choice D misstates the requirements: the spouses need not be divorced or separated, and the protective allocation can apply to other debts such as child support or student loans.
- Which of the following is correct regarding the executor's authority?
Answer: The executor may revoke the joint return by filing a separate 2025 return for John within one year after the last day prescribed by law for filing Maria's 2025 return.
IRC § 6013(a)(3). A surviving spouse may file a joint return for the year of death when no executor or administrator has been appointed. If an executor is appointed after the surviving spouse files, the executor may disaffirm (revoke) the joint return by making a separate return for the decedent within one year after the last day prescribed by law for filing the surviving spouse's return. Maria's 2025 return was due April 15, 2026, and she requested no extension, so the executor appointed in December 2026 may disaffirm by filing John's separate 2025 return by April 15, 2027. Choice D is correct. Choice A conditions the executor's right on Maria's consent, which the statute does not require. Choice C treats the joint return as binding on the estate, but the statute gives a later-appointed executor the right to disaffirm it. Choice B substitutes the general assessment period under IRC § 6501 for the one-year disaffirmance period.
- Which of the following is correct regarding relief from joint and several liability for spouses who filed a joint federal income tax return?
Answer: A spouse requesting relief under IRC § 6015(b) must show that an understatement is attributable to erroneous items of the other spouse, that the requesting spouse had no actual knowledge and no reason to know of it, and that it would be inequitable to hold the requesting spouse liable.
Authority: IRC § 6015(b), (c), and (f); Form 8857. Choice A correctly lists the elements of innocent spouse relief under § 6015(b): the understatement is attributable to the other spouse's erroneous items, the requesting spouse had neither actual knowledge nor reason to know, and it is inequitable to hold the requesting spouse liable. Choice B incorrectly imports the § 6015(b) reason-to-know standard into § 6015(c); separation of liability uses an actual-knowledge exception, not a no-reason-to-know requirement. Choice C incorrectly limits § 6015(f) to understatements; equitable relief may cover unpaid liabilities. Choice D is wrong because the request is made on Form 8857, not Form 8379.
