Exam 1: The Individual Income Tax Return

Which of the following is not considered one of the five basic taxable or reporting entities?​

Mike purchased stock in MDH Corporation 5 years ago for $15,500. This year he sold it for $12,650 and then paid a $250 sales commission to his broker. He had no other capital gains or losses during the year. a.What is Mike's amount realized? b.What is Mike's adjusted basis? c.What is Mike's realized gain or loss? d.What is Mike's recognized gain or loss? e.How much of the gain or loss can Mike report in his tax return?

Eugene and Velma are married. For 2015, Eugene earned $25,000 and Velma earned $30,000. They have decided to file separate returns and are each entitled to claim one personal exemption. They have no deductions for adjusted gross income. Eugene's itemized deductions are $11,200 and Velma's are $4,000. Assuming Eugene and Velma do not live in a community property state, what is Eugene's taxable income?

A corporation is a reporting entity but not a tax-paying entity.

Married taxpayers may double their standard deduction amount by filing separate returns.

Clay purchased Elm Corporation stock 20 years ago for $10,000. In 2015, he sells the stock for $29,000. What is Clay's gain or loss?

If a taxpayer is due a refund, it will be mailed to the taxpayer regardless of whether he or she files a tax return.

For taxpayers who do not itemize deductions, the standard deduction amount is subtracted from the taxpayer's adjusted gross income.

Which of the following is not a capital asset?

John, 45 years old and unmarried, contributed $1,000 monthly in 2015 to the support of his parents' household. The parents lived alone and their income for 2015 consisted of $500 from dividends and interest. What is John's filing status and how many exemptions should he claim on his 2015 tax return?

Ronald is 92 years old and in poor health. Clever investing earlier in his life has left him with a sizeable income. He is able to support his son Ed. Ed is 67 years old and a bit "confused," so he lives in a nursing home. Ed's income is less than $2,000. How many exemptions should Ronald claim on his tax return?

During 2015, Murray, who is 60 years old and unmarried, provided all of the support of his elderly mother. His mother was a resident of a home for the aged for the entire year and had no income. What is Murray's filing status for 2015, and how many exemptions should he claim on his tax return?

List each alternative filing status available to unmarried individual taxpayers.

Madeline is single and supports her 85-year-old parents who live in a senior home paid for by Madeline and have no income. What is Madeline's filing status and why?

Karen is single and earns wages of $250,000 in 2015. She has no other income. How much is her ACA Medicare surtax on earned income?

Which of the following forms may be filed by individual taxpayers?

What is the difference between the standard deduction and itemized deductions?

Theodore, age 74, and Maureen, age 59, are married taxpayers with two dependents. Their adjusted gross income for the 2015 tax year is $43,600, and they have itemized deductions of $7,800. Determine the following for Theodore and Maureen's 2015 income tax return: a.The number of exemptions b.The greater of the amount of their standard deduction or their itemized deductions c.Their taxable income

State two reasons why a person would want to e-file their return instead of mailing it.

Match the letter of the filing status to the taxpayers below. Items may be used more than once. -The taxpayer who is unmarried legally adopted a child who lives with her.