Exam 3: Taxable Entities, Tax Formula, Introduction to Property Transactions

Which of the following is not true of A.G.I.?

G is an 11-year-old heiress whose share of income from various sources is as follows for the current year: G's A.G.I, (ignoring the deduction for one-half of any self-employment tax, if any) is how much?

A partnership is taxed at the same rates as estates and trusts for Federal income tax purposes.

W, a U.S.citizen, earned $6,000 from foreign sources on which she paid tax of $1,200 to the foreign government.W's U.S.tax was $4,000, $1,500 of which was on the foreign income.W must pay $2,800, after the foreign tax credit, to the United States.

The following represent elements of the tax formula for individual taxpayers: A.Income from any source B.Personal and dependency exemptions C.Itemized deductions D.Deductions for A.G.I. E.Exclusions from gross income F.Standard deduction amount Which of the items listed are considered in arriving at A.G.I.?

Barnum and Bailey incorporated their circus this year and elected to be treated as an S corporation.Barnum owns 60% of the corporation's stock while Bailey owns the remaining 40%.This year, the corporation had net income of $300,000 before the owners took any money out of the business (e.g., before salaries, dividend distributions, etc.).Assuming the corporation paid Barnum a deductible salary of $100,000 for managing the business and made dividend distributions of $12,000 to Barnum and $8,000 to Bailey, what is the amount of taxable income to be reported by Barnum?

Which of the following income is generally excluded from gross income?

An increase in adjusted gross income can cause a decrease in certain otherwise allowable itemized deductions.