Exam 2: Determination of Tax

Avi and Rianna are considering marriage before year-end.They each earn a salary of about $150,000,have some investment income and some itemized deductions.What additional taxes will Avi and Rianna face as a married couple?

A taxpayer can receive innocent spouse relief if

Tony supports the following individuals during the current year: Miranda,his former mother-in-law who lives in her own home and has no gross income;his cousin,Jeff,age 23,who is a full-time student,earns $7,000 during the year,and lives with Tony all year long;and Matt,age 22,who is Tony's brother,is a full-time student living on campus and earns $8,000 during the year.How many dependency exemptions may Tony claim?

One requirement for claiming a dependent as a qualifying relative is that the taxpayer provides more than 50 percent of the dependent's support (assuming it is not a multiple support agreement situation).

Anna is supported entirely by her three sons John,James,and Joseph who provide for her support in the following percentages: Assuming a multiple support declaration exists,which of the brothers may claim his mother as a dependent?

An individual who is claimed as a dependent by another person is not entitled to a personal exemption on his or her own return.

Discuss reasons why a married couple may choose not to file a joint return.

All of the following items are deductions for adjusted gross income except

Generally,when a married couple files a joint return,each spouse is liable for one-half of the entire tax and any penalties incurred.

Taxpayers have the choice of claiming either the personal and dependency exemption or the standard deduction.

Eliza Smith's father,Victor,lives with Eliza who is a single taxpayer.During the year,Eliza purchased clothing for her father costing $1,200 and provided him with a room that could have been rented for $6,000.In addition,Eliza spent $4,000 for groceries she shared with her father.Eliza purchased a new television for $900 which she placed in the living room for both her father and her use. What is the amount of support provided by Eliza to her father?

The requirement to file a tax return is based on the individual's adjusted gross income.

In 2013,Leo's wife died.Leo has two small children,ages 2 and 4,living at home whom he supports entirely.Leo does not remarry and is not claimed as a dependent on another's return during any of this period.In 2014,2015,and 2016,Leo's most advantageous filing status is,respectively

In order to shift the taxation of dividend income from a parent to a child,

All of the following items are generally excluded from income except

The person claiming a dependency exemption under a multiple support declaration must provide more than 25% of the dependent's support.

Generally,in the case of a divorced couple,the parent who has physical custody of a child for the greater part of the year is entitled to the dependency exemption.

Lester,a widower qualifying as a surviving spouse,has $209,000 of salary,five personal and dependency exemptions and itemizes deductions.Lester must use which form to report his taxable income?

In 2015,Sam is single and rents an apartment for which he pays $800 per month and makes charitable contributions of $1,000.Sam's adjusted gross income is $47,000. Required: Compute his taxable income.Show all calculations.

Liz and Bert divorce and Liz receives custody of their child.Bert is ordered by the court to pay child support of $10,000 per year,and Liz files the appropriate IRS form to allow Bert to claim the dependency exemption for the child.If Liz maintains the home in which she and her child live,her filing status and exemptions claimed will be