Exam 3: Computing the Tax

During 2015,Jackson had the following capital gains and losses: Gain from the sale of coin collection (held three years) $12,000 Gain from the sale of land held as an investment for six years 9,000 Gain from the sale of stock held as an investment (held for 10 months) 3,000 ​ a.How much is Jackson's tax liability if he is in the 15% tax bracket? b.If his tax bracket is 33% (not 15%)?

In 2015,Cindy had the following transactions: Salary $90,000 Short-term capital gain from a stock investment 4,000 Moving expense to change jobs (11,000) Received repayment of $20,000 loan she made to her sister in 2011 (includes no interest) 20,000 State income taxes (5,000) Cindy's AGI is:

Regarding dependency exemptions, classify each statement in one of the four categories: a.Could be a qualifying child.b.Could be a qualifying relative.c.Could be either a qualifying child or a qualifying relative.d.Could be neither a qualifying child nor a qualifying relative. -A half-brother who lives with taxpayer.

In satisfying the support test and the gross income test for claiming a dependency exemption,a scholarship received by the person being claimed is handled the same way for each test.Do you agree or disagree with this statement? Why?

Claude's deductions from AGI exceed the standard deduction allowed for 2015.Under these circumstances,Claude cannot claim the standard deduction.

The Hutters filed a joint return for 2015.They provide more than 50% of the support of Carla,Melvin,and Aaron.Carla (age 18) is a cousin and earns $2,800 from a part-time job.Melvin (age 25) is their son and is a full-time law student.He received from the university a $3,800 scholarship for tuition.Aaron is a brother who is a citizen of Israel but resides in France.Carla and Melvin live with the Hutters.How many personal and dependency exemptions can the Hutters claim on their Federal income tax return?

Buddy and Hazel are ages 72 and 71 and file a joint return.If they have itemized deductions of $14,600 for 2015,they should not claim the standard deduction.

Albert buys his mother a TV.For purposes of meeting the support test,Albert cannot include the cost of the TV.

Emily had the following transactions during 2016: Salary $90,000 Interest income on bonds- Issued by City of Nashville $4,000 Issued by Chevron Corporation 5,000 9,000 Alimony received 5,000 Child support received 20,000 City and state income taxes paid (5,000) Bank loan obtained to pay for car purchase 15,000 What is Emily's AGI for 2016?

List at least three exceptions to the application of the kiddie tax.

Regarding dependency exemptions, classify each statement in one of the four categories: a.Could be a qualifying child.b.Could be a qualifying relative.c.Could be either a qualifying child or a qualifying relative.d.Could be neither a qualifying child nor a qualifying relative. -A daughter who does not live with taxpayer.

As opposed to itemizing deductions from AGI,the majority of individual taxpayers choose the standard deduction.

During the year,Kim sold the following assets: business auto for a $1,000 loss,stock investment for a $1,000 loss,and pleasure yacht for a $1,000 loss.Presuming adequate income,how much of these losses may Kim claim?

Ed is divorced and maintains a home in which he and a dependent friend live.Ed does not qualify for head of household filing status.

Regarding dependency exemptions, classify each statement in one of the four categories: a.Could be a qualifying child.b.Could be a qualifying relative.c.Could be either a qualifying child or a qualifying relative.d.Could be neither a qualifying child nor a qualifying relative. -A nephew who lives with taxpayer.

Merle is a widow,age 80 and blind,who is claimed as a dependent by her son.During 2015,she received $4,800 in Social Security benefits,$2,500 in bank interest,and $1,800 in cash dividends from stocks.Merle's taxable income is:

During 2015,Lisa (age 66) furnished more than 50% of the support of the following persons: ∙ Lisa's current husband who has no income and is not claimed by someone else as a dependent. ∙ ​ Lisa's stepson (age 19) who lives with her and earns $6,000 as a dance instructor.He dropped out of school a year ago. ∙ Lisa's ex-husband who does not live with her.The divorce occurred two years ago. ∙ Lisa's former brother-in-law who does not live with her. Presuming all other dependency tests are met,on a separate return how many personal and dependency exemptions may Lisa claim?

Regarding the rules applicable to filing of income tax returns,which,if any,of the following is an incorrect statement:

A dependent cannot claim a personal exemption on his or her own return.

Match the statements that relate to each other.Note: Choice l.may be used more than once. a.Not available to 65-year old taxpayer who itemizes.b.Exception for U.S.citizenship or residency test (for dependency exemption purposes).c.Largest basic standard deduction available to a dependent who has no earned income.d.Considered for dependency exemption purposes.e.Qualifies for head of household filing status.f.A child (age 15) who is a dependent and has only earned income.g.Considered in applying gross income test (for dependency exemption purposes).h.Not considered in applying the gross income test (for dependency exemption purposes).i.Unmarried taxpayer who can use the same tax rates as married persons filing jointly.j.Exception to the support test (for dependency exemption purposes).k.A child (age 16) who is a dependent and has only unearned income of $4,500.l.No correct match provided. -Basic standard deduction