Exam 3: Tax Formula and Tax Determination; an Overview of Property Transactions

Because they appear on page 1 of Form 1040,itemized deductions are also referred to as "page 1 deductions."

Even if the individual does not spend funds that have been received from another source (e.g.,interest on municipal bonds),the unexpended amounts are considered for purposes of the support test.

Jayden and Chloe Harper are husband and wife and use the calendar year for tax purposes.

For 2012,Stuart has a short-term capital loss,a collectible long-term capital gain,and a long-term capital gain from land held as investment.The short-term loss is first applied to the collectible capital gain.

For dependents who have income,special filing requirements apply.

Darren,age 20 and not disabled,earns $4,000 during 2012.Darren's parents cannot claim him as a dependent unless he is a full-time student.

Kirby is in the 15% tax bracket and had the following capital asset transactions during 2012: Kirby's tax consequences from these gains are as follows:

Arnold is married to Sybil,who abandoned him in 2011.He has not seen or communicated with her since April of that year.He maintains a household in which their son,Evans,lives.Evans is age 25 and earns over $6,000 each year.For tax year 2012,Arnold's filing status is:

In which,if any,of the following situations may the individual not be claimed as a dependent of the taxpayer?

For the past few years,Corey's filing status has been as follows: 2008 (married/joint); 2009 (married/separate); 2010 (surviving spouse); 2011 (surviving spouse); and 2012 (head of household).Explain what probably has happened.

Emily,whose husband died in December 2011,maintains a household in which her dependent daughter lives.Which (if any)of the following is her filing status for the tax year 2012? (Note: Emily is the executor of her husband's estate.)

During the year,Irv had the following transactions: How are these transactions handled for income tax purposes?

Mr.Lee is a citizen and resident of Hong Kong,while Mr.Anderson is a citizen and resident of the U.S.In the taxation of income,Hong Kong uses a territorial approach,while the U.S.follows the global system.In terms of effect,explain what this means to Mr.Lee and Mr.Anderson.

Once a child reaches age 19,the kiddie tax no longer applies.

Kyle,whose wife died in December 2009,filed a joint tax return for 2009.He did not remarry,but has continued to maintain his home in which his two dependent children live.What is Kyle's filing status as to 2012?

In determining whether the support test is met for dependency exemption purposes,only the taxable portion of a scholarship is considered.

Katrina,age 16,is claimed as a dependent by her parents.During 2012,she earned $5,600 as a checker at a grocery store.Her standard deduction is $5,900 ($5,600 earned income + $300).

Many taxpayers who previously itemized will start claiming the standard deduction when they purchase a home.

Tom is single and for 2012 has AGI of $50,000.He is age 70 and has no dependents.For 2012,he has itemized deductions from AGI of $7,000.Determine Tom's taxable income for 2012.

Which of the following items,if any,is deductible?