Exam 2: Determination of Tax

Which of the following types of itemized deductions are included in the category of miscellaneous expenses that are deductible only if the aggregate amount of such expenses exceeds 2% of the taxpayer's adjusted gross income?

The standard deduction may not be claimed by one married taxpayer filing a separate return if the other spouse itemizes deductions.

A $10,000 gain earned on stock held 13 months is taxed in a more favorable manner than a $10,000 gain earned on stock held 11 months.

Anita,who is divorced,maintains a home in which she and her 16-year-old daughter live.Anita provides the majority of the support for her daughter and for a son,age 23,who is enrolled part-time at the university and lives in the dorm.The son also works in the campus bookstore and earns spending money of $4,500.How many personal and dependency exemptions may Anita claim?

Discuss reasons why a married couple may choose not to file a joint return.

A married couple need not live together to file a joint return.

When two or more people qualify to claim the same person as a dependent,a taxpayer who is entitled to the exemption through the qualified child rules has priority over a taxpayer who meets the requirements for other relatives.

David's father is retired and receives $14,000 per year in Social Security benefits.David's father saves $4,000 of the benefits and spends the remaining $10,000 for his support.How much support must David provide for his father to meet the dependent support requirement?

If an individual with a marginal tax rate of 25% has a long-term capital gain,it is taxed at

Blaine Greer lives alone.His support comes from the following sources: Assuming a multiple support declaration exists,which of the individuals may claim Blaine as a dependent?

Taquin,age 67 and single,paid home mortgage interest of $4,000,charitable contributions of $2,000 and property taxes of $3,000 in 2017.He has no dependents.In addition to the personal exemption,Taquin will claim a deduction from AGI of

A widow or widower may file a joint tax return and claim an exemption for the deceased spouse in the year of the spouse's death as long as the surviving spouse does not remarry before the end of the year.

Paul and Sally file a joint return showing $87,000 of AGI.They have three dependent children ages 6,8,and 13.What is the amount of their child credit?

The annual tax reporting form filed with the IRS by C corporations is the Schedule C.

For each of the following taxpayers indicate the applicable filing status,the number of personal and dependency exemptions available,and the number of children who qualify for the child credit. a.Jeffrey is a widower,age 71,who receives a pension of $10,000,nontaxable social security benefits of $12,000,and interest of $2,000.He has no dependents. b.Selma is a single,full-time college student,age 20,who earned $6,800 working part-time.She has $1,700 of interest income and received $1,000 support from her parents. c.Olivia is married,but her husband left her three years ago and she has not seen or heard from him since.She supports herself and her six-year-old daughter.She paid all the household expenses.Her income consists of salary of $18,500 and interest of $800. d.Ruben is a single,full-time college student,age 20,who earned $6,800 working part-time.He has $250 of interest income and received $10,000 support from his parents. e.Cathy is divorced and received $12,000 alimony from her former husband and earned $35,000 working as an administrative assistant.She also received $2,500 of child support for her daughter who lives with her.Cathy filed the appropriate IRS form and gave up the dependency exemption to her former husband.

Foreign exchange student Yung lives with Harold and Betty while he studies in the United States.He moved into their home January 5,2017,and has resided with them for the remainder of the year.Yung does not pay anything for his room and board.Harold and Betty provide all of Yung's meals.Yung receives a scholarship to pay for his tuition,books and fees.He works on campus,earning $4,000 a year.What tax issues should Harold and Betty consider?

Rena and Ronald,a married couple,each earn a salary of $200,000.They will be required to pay additional payroll taxes in 2017 of

Taxpayers have the choice of claiming either the personal and dependency exemption or the standard deduction.

Vincent,age 12,is a dependent of his parents.During 2017,Vincent's earned income from wages is $2,600 and Vincent received $3,000 of interest income.The parent's marginal rate is 28% and Vincent's marginal rate is 10%.Vincent's tax is

Edward,a widower whose wife died in 2014,maintains a household for himself and his 10-year-old daughter.Edward's most favorable filing status for 2017 is