Exam 18: Determination of Tax

Julia provides more than 50 percent of the support for three individuals: Theresa,an unrelated child who lives with Julia all year long; Margaret,Julia's cousin,who lives in another city; and Emma,Julia's daughter,who lives in her own home.Each of the potential dependents earned less than $4,050.How many dependency exemptions can Julia claim on her 2017 tax return?

Tax returns from individual and C corporate taxpayers are due on the 15th day of the third month following the close of the tax year.

Edward,a widower whose wife died in 2014,maintains a household for himself and his 10-year-old daughter.Edward's most favorable filing status for 2017 is

Dave,age 59 and divorced,is the sole support of his mother age 83,who is a resident of a local nursing home for the entire year.Dave's mother had no income for the year.Dave's filing status and exemptions claimed are

Rob is a taxpayer in the top tax bracket,with over a million in taxable income.He plans to sell stock held long term for a $100,000 gain.This sale will result in an increase to his tax liability of

In 2014,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 2015,2016,and 2017,Leo's most advantageous filing status is,respectively

A $10,000 gain earned on stock held 13 months is taxed in a more favorable manner than a $10,000 gain earned on stock held 11 months.

Sean and Martha are both over age 65 and Martha is considered blind by tax law standards.Their total income in 2017 from part-time jobs and interest income from a bank savings account is $60,000.Their itemized deductions are $12,000. Required: Compute their taxable income.

Artco Inc.is a C corporation.This year it earned $50,000 of taxable income and paid a $10,000 distribution (dividend)to Lily,its sole shareholder.Lily has a marginal tax rate of 25%.Due to the corporation's results and the distribution paid,the IRS will receive total taxes of

Maxine,who is 76 years old and single,is appropriately claimed as a dependent on her daughter Beth's tax return.During 2017 she received $500 interest on a savings account.She had a part time job that earned $3,000.Her total itemized deductions were $1,300. Required: Compute Maxine's taxable income for 2017.Show all calculations.

Lewis,who is single,is claimed as a dependent on his parents' tax return.He received $2,000 during the year in dividends,which was his only income.What is his standard deduction for 2017?

A married taxpayer may file as head of household under the abandoned spouse provisions if all of the following are met except

Carter dies on January 1,2017.A joint return election is made in 2017 and Marjorie properly qualifies as a surviving spouse for the two following years.Marjorie has one child that she claims as a dependent for this same period.The number of personal and dependency exemptions allowed Marjorie in 2017 and in 2018,respectively:

Silver Inc.is an S corporation.This year it earned $50,000 of taxable income and paid a $10,000 distribution to Daisy,its sole shareholder.Daisy has a marginal tax rate of 25%.Due to the corporation's results and the distribution paid,the IRS will receive total taxes of

If a 13-year-old has earned income of $500 and unearned income of $2,500,all of the income can be reported on the parent's return.

Annisa,who is 28 and single,has adjusted gross income of $55,000 and itemized deductions of $5,000.In 2017,Annisa will have taxable income of

Which of the following types of itemized deductions are included in the category of miscellaneous expenses that are deductible only if the aggregate amount of such expenses exceeds 2% of the taxpayer's adjusted gross income?

Keith,age 17,is a dependent of his parents.During 2017,he received $3,000 of dividend income.The parent's marginal rate is 28% and Keith's rate is 10%.Keith's tax is

Steve Greene,age 66,is divorced with no dependents.In 2017 Steve had income and expenses as follows: Compute Steve's taxable income for 2017.Show all calculations.

The following information is available for Bob and Brenda Horton,a married couple filing a joint return,for 2017.Both Bob and Brenda are age 32 and have no dependents. a.What is the amount of their gross income? b.What is the amount of their adjusted gross income? c.What is the amount of their taxable income? d.What is the amount of their tax liability (gross tax),rounded to the nearest dollar? e.What is the amount of their tax due or (refund due)?