Exam 1: The Individual Income Tax Return

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

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

The head of household tax rates are higher than the rates for a single taxpayer.

How should a taxpayer decide whether to take the standard deduction or claim itemized deductions?

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.

An individual taxpayer with a net capital loss may deduct up to $3,000 per year against ordinary income.

John, age 25, is a full-time student at a state university.John lives with his unmarried sister, Ann, who provides over half of his support.His only income is $4,200 of wages from a part-time job at the college book store.What is Ann's filing status for 2018?

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?

Wesley has a fairly simple tax situation with moderate wage income and a modest amount of interest income.Wesley wishes to use the easiest possible tax form.He may file:

Robert is a single taxpayer who has AGI of $145,000 in 2018; his taxable income is $122,000.What is his federal tax liability for 2018?

Partnership capital gains and losses are allocated separately to each of the partners.

A dependent child with earned income in excess of the available standard deduction amount must file a tax return.

Roger, age 39, and Lucy, age 37, are married taxpayers who file a joint income tax return for 2018.They have gross income of $26,100.Their deductions for adjusted gross income are $550 and they have itemized deductions of $5,400.If Roger and Lucy have no dependents for 2018, 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

Nathan is 24 years old, single, and works as an accountant in a salmon cannery in Alaska.His total wages for 2018 were $32,000.Federal income tax of $4,500 was withheld from his wages.His only other income was $260 of interest and he had no deductible expenses.​Calculate the income tax due or income tax refund on Nathan's 2018 individual income tax return.Use the tax formula for individuals and show your work.

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

Barry is age 45 and a single taxpayer.In 2018, he has gross income of $17,000 and itemized deductions of $6,500.If Barry claims no dependents on his 2018 income tax return, calculate the following amounts: a.His personal exemption amount b.Barry's taxable income

Match the letter of the filing status to the taxpayers below. Items may be used more than once. a.Single b.Married filing a joint return c.Married filing separate returns d.Head of household e.Qualifying widow(er) f.Married filing joint or married filing separate -The unmarried taxpayer supports his dependent mother, who lives next door in a separate apartment.

John, 45 years old and unmarried, contributed $1,000 monthly in 2018 to the support of his parents' household.The parents lived alone and their income for 2018 consisted of $500 from dividends and interest.What is John's filing status and how many dependents should he claim on his 2018 tax return?

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

Distinguish between reporting entities and taxable entities and give examples of each.