Exam 5: Deductions for Individuals and Tax Determination

Lisa's husband died in 2016.Lisa did not remarry, and continued to maintain a home for herself and her dependent daughter during 2017, 2018, and 2019 providing full support for herself and her daughter during these years.For 2019, Lisa's filing status is:

The 2019 standard deduction for a married taxpayer, age 68, who files a separate return is:

Colin (single and age 40) has AGI of $100,000.Colin provided the following information about his cash expenditures for 2019: Interest on loan to purchase corporate securities $ 900 Interest on American Express card 1,200 Points to refinance his home for 10 years at the end of December 2,600 Mortgage interest payments 11,800 Real estate taxes 2,100 State income taxes withheld on salary 5,400 Additional state income tax estimated payment 1,200 Contribution to Republican Party 2,000 Contribution to United Way 500 If Colin does not itemize, what is his total deduction from AGI in 2019:

An abandoned spouse must only live apart from his or her spouse during the last six months of the tax year.

John and Mary have three children: Aaron (age 14), Anna (age 16), and Tammy (age 21).Anna works after school and earned $4,000 in 2019.Tammy works 30 hours per week and is a part-time student at the local community college earning $8,400 in 2019.If John and Mary's AGI in 2019 is $200,000, how much can they claim on their joint tax return for the child tax credit?

A legally married couple can elect to file as married filing jointly or single individuals.

Up to $10,000 ($5,000 if married filing separately) of income and real property taxes are deductible for state, local, and foreign real property.

Sebastian (age 46) and Kaitlin (age 45) are married and file a joint tax return.Their 2019 adjusted gross income is $390,000 and includes $2,600 in investment income ($2,000 in short-term capital gains and $600 of interest income).They provided 100% of the support for their daughter, Olivia, age 26, who lives with them, and earned $4,700 from her part-time job.They also provided 100 percent of the support for Sebastian's mother, Emily, who is 67, blind, and lives in a nursing home.Emily received $4,000 in Social Security benefits and $450 of interest income.Sebastian and Kaitlin also paid the following amounts in 2019: -$38,500 interest on their home mortgage (acquisition debt) on their principal residence purchased in 1995.The principal amount of the mortgage is $1,250,000. -They also paid $8,250 in real estate taxes on the home. -$6,000 investment interest expense -$7,600 unreimbursed employee business expenses (none for meal or entertainment expenses) -$1,650 in state income taxes to the state of California where Sebastian worked for part of the year -$1,400 in state and local general sales taxes -$490 in fees to their CPA for preparation of their tax return -$2,500 contributed to the State University Athletic Booster Club (to allow them to purchase tickets in good seat locations for football games) and $1,000 contributed to the State University Business School Alumni Association for academic scholarships.They also donated a painting (purchased 11 years ago for $4,200) to the Salvation Army, which was then sold for its fair market value of $17,000 at its fundraising auction. How much can Sebastian and Kaitlin deduct for charitable contributions for 2019?

In 2019, Amber earned a salary of $230,000 and also had the following items of investment income: $28,000 net short-term capital gain on sale of stock, $8,000 dividend income, $6,000 interest income from corporate bonds, and $5,000 interest income from tax-exempt municipal bonds.Compute Amber's net investment income (NII) tax if the tax rate is 3.8% and the threshold is $200,000.

Health insurance premiums that are deductible as medical expenses include premiums paid pre-tax through a flexible spending account.

Colin (age 40) is single and itemizes his deductions.His AGI is $100,000.Colin provided the following information about his cash expenditures for 2019: Interest on loan to purchase corporate securities $ 900 Interest on American Express card 1,200 Points to refinance his home at the end of December 2,600 Mortgage interest payments 11,800 Real estate taxes 2,100 State income taxes withheld on salary 5,400 Additional state income tax estimated payment 1,200 Contribution to Republican Party 2,000 Contribution to United Way 500 How much are Colin's deductible contributions?

Cindy has taxable income of $67,000 excluding a $20,000 taxable gain on the sale of bonds she purchased 7 years ago.If Cindy is single, what is her total tax liability for 2019?

The additional 0.9 percent Medicare surtax applies to earned income of individuals with wages in excess of $200,000 but does not apply to self-employed individuals.

Patricia's AGI was $80,000 in both 2018 and 2019.She made cash contributions to public charities of $43,000 in 2018 and $50,000 in 2019.Patricia's charitable contribution carryover to 2020 is:

Which of the following statements is true regarding the deductibility of investment interest expense?

Qualifying low-income wage earners may not only deduct their IRA contributions but they may take a credit for their contribution.

Which of the following is a refundable credit?

Which of the following is a requirement to file for head of household?

Beginning in 2019, qualified medical expenses for a 66-year-old single individual must exceed 10 percent of AGI to be deductible for regular income tax purposes.

Sebastian (age 46) and Kaitlin (age 45) are married and file a joint tax return.Their 2019 adjusted gross income is $390,000 and includes $2,600 in investment income ($2,000 in short-term capital gains and $600 of interest income).They provided 100% of the support for their daughter, Olivia, age 26, who lives with them, and earned $4,700 from her part-time job.They also provided 100 percent of the support for Sebastian's mother, Emily, who is 67, blind, and lives in a nursing home.Emily received $4,000 in Social Security benefits and $450 of interest income.Sebastian and Kaitlin also paid the following amounts in 2019: -$38,500 interest on their home mortgage (acquisition debt) on their principal residence purchased in 1995.The principal amount of the mortgage is $1,250,000. -They also paid $8,250 in real estate taxes on the home. -$6,000 investment interest expense -$7,600 unreimbursed employee business expenses (none for meal or entertainment expenses) -$1,650 in state income taxes to the state of California where Sebastian worked for part of the year -$1,400 in state and local general sales taxes -$490 in fees to their CPA for preparation of their tax return -$2,500 contributed to the State University Athletic Booster Club (to allow them to purchase tickets in good seat locations for football games) and $1,000 contributed to the State University Business School Alumni Association for academic scholarships.They also donated a painting (purchased 11 years ago for $4,200) to the Salvation Army, which was then sold for its fair market value of $17,000 at its fundraising auction. How much can Sebastian and Kaitlin deduct for taxes for 2019?