Exam 1: The Individual Income Tax Return

Rod, age 50, and Ann, age 49, are married taxpayers who file a joint return for 2015. They have gross income of $150,700. Their deductions for adjusted gross income are $5,100 and they have itemized deductions of $12,000, consisting of $7,000 in state income taxes and $5,000 in mortgage interest expense. If they claim two personal exemptions and no dependency exemptions for 2015, calculate the following amounts: ​ a.Their adjusted gross income b.The greater of the amount of their standard deduction or their itemized deductions c.Their taxable income

Wesley owns and operates the Cheshire Chicken Ranch in Turpid, Nevada. The income from this ranch is $49,000. Wesley wishes to use the easiest possible tax form. He may file:

Form 1040 allows a taxpayer to report which of the following items that are not allowed for taxpayers who file Form 1040A:

Alexis has a long-term capital loss of $13,000 on the sale of stock in 2015. She has no other capital gains or losses for the year. Her taxable income without this transaction is $60,000. What is her 2015 taxable income considering this capital loss?

William is a divorced taxpayer who provides a home for his dependent child, Edward. What filing status should William indicate on his tax return?

Mark a "Yes" to each of the following if it is an objective of the tax code. Otherwise mark with a "No." a.To provide a car to each American. b.To promote giving to charities. c.To encourage taxpayers to send their children to college. d.To raise money to operate the government. e.To promote the use of solar energy.

Which of the following relatives will not satisfy the relationship test for the dependency exemption?

Taxpayers who are blind get the benefit of: