Exam 1: The Individual Income Tax Return

George,age 67,and Linda,age 60,are married taxpayers with two dependent children.Their adjusted gross income for the 2013 tax year is $138,000.They have itemized deductions of $24,000.Determine the following for their joint tax return for 2013: a.The number of exemptions b.Exemption deduction amount c.The greater of the amount of their standard deduction or their itemized deductions d.Taxable income

An individual,age 22,enrolled on a full-time basis at a trade school,is considered a student for purposes of determining whether a dependency exemption is permitted.

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.

During 2013,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 2013,and how many exemptions should he claim on his tax return?

If an unmarried taxpayer paid more than half the cost of keeping a home which is the principal place of residence of a nephew,who is not her dependent,she may use the head of household filing status.

The maximum official individual income tax rate for 2013 is 39.6 percent,not including the Medicare surtax on net investment income.

Bob owns a rental property that he bought several years ago for $260,000.He has taken depreciation on the house of $37,000 since buying it.He sells it in 2013 for $290,000.His selling expenses were $12,000 for the year.What was Bob's realized gain on the sale?

In 2013,the Affordable Care Act ACA)added a new Medicare surtax of 3.8 percent on net investment income.

Partnership income is reported on:

Jill is a 16-year-old child who is claimed as a dependent by her parents.Jill's only income is $1,400 from her bank savings account.What is the amount of Jill's standard deduction for 2013?

Which of the following is not a test that must be met for a child to be considered a dependent?

Alan,whose wife died in 2011,filed a joint tax return for 2011.He did not remarry and continues to maintain his home in which his four dependent children live.In the preparation of his tax return for 2013,Alan should file as:

If your spouse dies during the tax year and you do not remarry,you must file as single for the year of death.

If taxpayers are married and living together at the end of the year,they must file a joint tax return.

During 2013,Howard maintained his home in which he and his 16 year-old son resided.The son qualifies as his dependent.Howard's wife died in 2012.What is his filing status for 2013?

A child for whom a dependency exemption is claimed on the parents' tax return may also claim a personal exemption on his or her own tax return.

Mary is age 33 and a single taxpayer with adjusted gross income for 2013 of $21,040.Mary maintains a home for two dependent children and has itemized deductions of $3,000.Calculate the following amounts for Mary's 2013 income tax return: a.The number of exemptions claimed b.Mary's standard or itemized deduction amount c.Mary's taxable income

Karl's father,Vronsky,is a 60-year-old Russian citizen who lived in Russia for the full year.Karl supported Vronsky while he looked for work.Vronsky had no income.Can Karl claim Vronsky as a dependent?

Kenzie is a research scientist in Tallahassee,Florida.Her husband Gary stays home to take care of their two young children.Kenzie's total wages for 2013 were $60,000 from which $6,500 of federal income tax was withheld. Calculate the income tax due or income tax refund on Kenzie and Gary's 2013 individual income tax return.Use the tax formula for individuals and show your work.

Mike purchased stock in MDH Corporation 5 years ago for $15,250.This year he sold it for $12,800 and then paid a $150 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?