Exam 8: Taxation of Individuals

Armando has AGI of $80,000 and makes the following charitable contributions: ? - $\$ 10,000$ cash to American Heart Society. - $\$ 18,000$ cash to Redemption Church. $\$ 24,000$ worth of AOL stock acquired in 2005 with a basis of $\$ 10,000$ to Upper State University. What is Armando's maximum charitable deduction in the current year?

During the year, Arlene donates stock she had purchased in 2005 for $30,000 to a qualified public charitable organization. The fair market value of the stock at the time of the donation is $40,000. Her adjusted gross income for the year is $80,000. If the stock donation is her only charitable contribution, what is Arlene's charitable contribution deduction? What should she consider in determining the amount of the deduction?

Match each statement with the correct term below. -Personal interest

For purposes of the relationship test for dependents, which of the following does not qualify as a relative?

During the current year, Robbie and Anne pay the following taxes: ? State income tax (bal ance due for last year) \ 1,000 Estimated state income tax 2,400 Estimated federal income tax 3,250 Sales tax (Federal Sales tax table) 600 State gift tax 700 Property tax on personal residence 2,450 Real estate tax on condominium in Breckinridge, CO. 1,100 What amount can Robbie and Anne claim as an itemized deduction for taxes on their federal income tax return for the year?

Discuss why the distinction between deductions for adjusted gross income and deductions from adjusted gross income is important for individual taxpayers.

During 2018, Stephanie earns $2,700 from a summer job. She also has interest income of $400. Stephanie, age 19, is a full-time student at Omega College. She is a dependent of her parents. What is the amount of Stephanie's taxable income for 2018?

Mary Lou is a 22-year old student at Wilson College. She earned $4,300 at a summer job, which is less than half of her support. I.Mary Lou can claim a $500 family tax credit for herself even if her parents claim a $500 family tax credit as a dependent. II.Because Mary Lou is a full-time college student, and she provides less than half of her own support, her parents can claim a $500 family tax credit because she is their dependent. ​

Norton's spouse died in 2018. Norton has one child, age 7, living at home. Norton provides all of the support for the child. The child lives with Norton during 2018, 2019, 2020, and 2021. Norton's most advantageous filing status is

In October of the current year, Brandy and her husband Ben split up and do not speak to each other. Neither individual will cooperate with the other on finalizing the divorce. Ben supports their two children after the split up and maintains their household. What is Ben's filing status for the current year?

Randy is a single individual who receives a salary of $30,000. During 2018, he has $7,000 withheld for payment of his federal income taxes and $2,500 for his state income taxes. In 2019, he receives a $400 refund after filing his 2018 federal tax return and a $50 refund after filing his state tax return. I.Randy is allowed a deduction for the $2,500 of state taxes withheld from his salary on his 2018 federal tax return. II.If Randy has total itemized deductions of $12,400 on his 2018 federal tax return, he must include the $50 state tax refund in his 2019 gross income. ​

Which of the following individuals or couples qualify for the child and dependent-care credit? I.Jeff and Marion are married with 2 children ages 5 and 7. Jeff earns $57,000 but Marion has no earned income. She works as a volunteer for the local hospital. When Marion is working as a volunteer, they hire their neighbor to care for the children. During the year they paid $1,200 to their neighbor. II.Michael is single and earns $75,000. Michael pays $10,000 for a nurse to help care for his father who is disabled and lives with him. Michael is entitled to the dependency exemption for his father. ​

Ariel has two children, Christopher and Pat. Christopher is 25 years old and Pat is 22. Christopher is a full time student at Southern College, has a full tuition scholarship, and lived at school during the year. Pat works full-time and lives at home. Which test will prevent both Pat and Christopher from being qualifying children of Ariel?

Larry is a single parent with an 11-year-old daughter. Larry's adjusted gross income is $27,000, and he pays $2,100 in qualified child-care expenses. Larry can claim a child and dependent-care credit of:

Susan and Kyle are married and have two children ages 16 and 14. Their adjusted gross income for 2018 is $108,000. What total amount can they claim for the child tax credit plus the family tax credit?

The American Opportunity Scholarship Tax Credit provides for a 100% tax credit on the first $2,000 of qualifying expenses and a 50% tax credit for the next $2,000 of qualifying expenses paid during the year for each qualifying student.

Julius is a single taxpayer. During the year he pays the following amounts. Julius's adjusted gross income is $100,000 before considering these expenses. ? State income tax withhel d from paycheck \ 5,000 Federal income tax withheld from paycheck \ 15,000 FICA taxes withheld from paycheck \ 7,650 Cash contribution to state university \ 8,000 Renter's insurance on apartment \ 500 Cash contribution to church \ 2,000 Cable television subscription fees \ 1,000 Cost of professional wardrobe \ 7,000 What is Julius's taxable income?

In addition to the regular standard deduction taxpayers who are blind qualify for a second standard deduction of the same amount.

Toby, a single taxpayer with no dependents,made the following cash contributions during the current year. ? Salvation Army \ 3,000 Church 2,000 Toby's AGI is $100,000 and is in the 22% marginal tax rate. In addition to the expenditures described above, his only other qualified itemized deductions are home mortgage interest of $6,000 and property taxes of $2,000. What is the after-tax cost to Toby of his charitable contributions?

To qualify as a head of household, an unmarried taxpayer must pay more than half of the cost of maintaining a home that is the principal residence for more than half the year of a qualified dependent or an unmarried child who qualifies as a dependent.