Exam 2: Determination of Tax

A taxpayer is able to change his filing status from married filing jointly to married filing separately by filing an amended return.

Satish,age 11,is a dependent of his parents.His only source of income in 2017 is $3,000 of interest income on bonds given him by his grandparents.Satish's marginal rate is 10%,and his parent's marginal rate is 28%.Satish's tax is

Silver Inc.is an S corporation.This year it earned $50,000 of taxable income and paid a $10,000 distribution to Daisy,its sole shareholder.Daisy has a marginal tax rate of 25%.Due to the corporation's results and the distribution paid,the IRS will receive total taxes of

If a 13-year-old has earned income of $500 and unearned income of $2,500,all of the income can be reported on the parent's return.

In order to shift the taxation of dividend income from a parent to a child

The filing status in which the rates increase most rapidly is

Amber supports four individuals: Erin,her stepdaughter,who lives with her; Amy,her cousin,who lives in another state; Britney,her friend,who lives legally in Amber's home all year long; and Charlie,her father,who lives in another state.Assume that the dependency requirements other than residence are all met.How many personal and dependency exemptions may Amber claim?

Elise,age 20,is a full-time college student with earned income from wages of $4,400 and interest income of $500.Elise's parents provide more than half of her support.Elise's 2017 taxable income is

The term "gross income" means the total of all income from any source,but after reduction for exclusions.

Refundable tax credits are allowed to reduce or totally eliminate a taxpayer's tax liability but any credits in excess of the tax liability are lost.

Ray is starting a new business and trying to decide between a C corporation,S corporation and partnership.Which of the following statements regarding his decision is correct?

Hannah is single with no dependents and has a salary of $102,000 for 2017,along with tax exempt interest income of $3,000 from a municipality.Her itemized deductions total $6,600. Required: Compute her taxable income.

Eliza Smith's father,Victor,lives with Eliza who is a single taxpayer.During the year,Eliza purchased clothing for her father costing $1,200 and provided him with a room that could have been rented for $6,000.In addition,Eliza spent $4,000 for groceries she shared with her father.Eliza purchased a new computer for $900 which she placed in the living room for both her father and her use. What is the amount of support provided by Eliza to her father?

Shane and Alyssa (a married couple) have AGI of $345,000 in 2017.They bought a house this year and paid $16,000 of interest expense on the mortgage and paid $6,500 of property taxes.They will be allowed a deduction from AGI of

If an individual with a marginal tax rate of 15% has a long-term capital gain,it is taxed at

Form 4868,a six-month extension of time to file,allows a taxpayer to

Charlie is claimed as a dependent on his parents' tax return in 2017.He received $8,000 during the year from a part-time acting job,which was his only income.What is his standard deduction?

Liz and Bert divorce and Liz receives custody of their child.Bert is ordered by the court to pay child support of $10,000 per year,and Liz files the appropriate IRS form to allow Bert to claim the dependency exemption for the child.If Liz maintains the home in which she and her child live,her filing status and exemptions claimed will be

Ben,age 67,and Karla,age 58,have two children who live with them and for whom they provide total support.Their daughter is 21 years old,blind,is not a full-time student and has no income.Her twin brother is 21 years old,has good sight,is a full-time student and has income of $4,500.Ben and Karla can claim how many personal and dependency exemptions on their tax return?

The standard deduction is the maximum amount of itemized deductions which may be claimed by a taxpayer,and is based on an individual's filing status,age,and vision.