Question 1

Meg, age 23, is a full-time law student and is claimed by her parents as a dependent. During 2014, she received $1,400 interest income from a bank savings account and $6,000 from a part­time job. What is Meg's taxable income for 2014?

Accepted Answer

The answer of Meg, age 23, is a full-time law...

Question 2

Heloise, age 74 and a widow, is claimed as a dependent by her daughter. For 2014, she had income as follows: $2,500 interest on municipal bonds; $3,200 Social Security benefits; $3,000 income from a part-time job; and $2,800 dividends on stock investments. What is Heloise's taxable income for 2014?

Accepted Answer

The answer of Heloise, age 74 and a widow, is...

Question 3

During 2014, Madison had salary income of $80,000 and the following capital transactions:
 $\begin{array}{lr}
\text { LTCG } & \$ 13,000 \
\text { LTCL } & 15,000 \
\text { STCG } & 13,000 \
\text { STCL } & 6,000
\end{array}$ 
How are these transactions handled for income tax purposes?

Accepted Answer

The answer of During 2014, Madison had salary income of...

Question 4

In 2014, Tom is single and has AGI of $50,000. He is age 70, has no dependents, and has itemized deductions (i.e., from AGI) of $7,000. Determine Tom's taxable income for 2014.

Accepted Answer

The answer of In 2014, Tom is single and has...

Question 5

Ellen, age 39 and single, furnishes more than 50% of the support of her parents, who do not live with her. Ellen practices as a self-employed interior decorator and has gross income in 2014 of $120,000. Her deductions are as follows: $30,000 business and $8,100 itemized.
a. What is Ellen's taxable income for 2014?
b. Can Ellen qualify for head of household filing status? Explain.

Accepted Answer

The answer of Ellen, age 39 and single, furnishes more...

Question 6

Pedro is married to Consuela, who lives with him. Both are U.S. citizens and residents of Nebraska. Pedro furnishes all of the support of his parents, who are citizens and residents of Mexico. He also furnishes all of the support of Consuela's parents, who are citizens and residents of El Salvador. Consuela has no gross income for the year. If Pedro files as a married person filing separately, how many personal and dependency exemptions can he claim on his return?

Accepted Answer

The answer of Pedro is married to Consuela, who lives...

Question 7

During 2014, Jackson had the following capital gains and losses:
 $\begin{array}{llr}
  \text { Gain from the sale of coin collection (held three years) } &\$12,000\
 \text { Gain from the sale of land held as an investment for six years } &9,000\
 \text {Gain from the sale of stock held as an investment (held for 10 months)  } &3,000
\end{array}$
 
a. How much is Jackson's tax liability if he is in the 15% tax bracket?
b. If his tax bracket is 33% (not 15%)?

Accepted Answer

The answer of During 2014, Jackson had the following capital...

Question 8

Kirby is in the 15% tax bracket and had the following capital asset transactions during 2014:
$\begin{array}{llr}
  \text { Long-term gain from the sale of a coin collection  } &\$11,000\
 \text {Long-term gain from the sale of a land investment   } &10,000\
 \text { Short-term gain from the sale of a stock investment  } &2,000
\end{array}$

Kirby's tax consequences from these gains are as follows:
A) $ (5 \% \times \$ 10,000)+(15 \% \times \$ 13,000) $
B) $ (15 \% \times \$ 13,000)+(28 \% \times \$ 11,000) $
C) $ (0 \% \times \$ 10,000)+(15 \% \times \$ 13,000) $.
D) $ (15 \% \times \$ 23,000) $.
E)None of the above

Accepted Answer

The answer of Kirby is in the 15% tax bracket...

Question 9

During the year, Kim sold the following assets: business auto for a $1,000 loss, stock investment for a $1,000 loss, and pleasure yacht for a $1,000 loss. Presuming adequate income, how much of these losses may Kim claim?
A) $0.
B) $1,000.
C) $2,000.
D) $3,000.
E) None of the above.

Accepted Answer

The answer of During the year, Kim sold the following...

Question 10

For the current year, David has salary income of $80,000 and the following property transactions:
$\begin{array}{llr}
  \text {Stock investment sales-  } &\
 \text { Long-term capital gain } &\$9,000\
 \text {  Shoit-term capital loss} &(12,000)\
 \text { Loss on sale of camper (purchased 4 years ago and used for family vacations) } &(2,000)\
\end{array}$
 
What is David's AGI for the current year?
A) $76,000.
B) $77,000.
C) $78,000.
D) $89,000.
E) None of the above.

Accepted Answer

David's AGI for the current year can be calculated as follows:
Salary income = $80,000
Short-term capital gain = $1,000
Long-term capital loss = ($4,000)
Net capital loss deduction = $3,000
Adjusted Gross Income (AGI) = $80,000 + $1,000 - $4,000 - $3,000 = $74,000
Therefore, the answer is B, $77,000.

Question 11

Homer (age 68) and his wife Jean (age 70) file a joint return. They furnish all of the support of Luther (Homer's 90-year old father), who lives with them. In 2014, they received $6,000 of interest income on city of Chicago bonds and interest income on corporate bonds of $48,000. Compute Homer and Jean's taxable income for 2014.

Accepted Answer

The answer of Homer (age 68) and his wife Jean...

Question 12

Perry is in the 33% tax bracket. During 2014, he had the following capital asset transactions:
Gain from the sale of a stamp collection (held for 10 years)$\quad$$ 30,000
Gain from the sale of an investment in land (held for 4 years)$\quad$10,000
Gain from the sale of stock investment (held for 8 months)$\quad$4,000
4,000
Perry's tax consequences from these gains are as follows:
A)$ (15 \% \times \$ 30,000)+(33 \% \times \$ 4,000) $
B) $ (15 \% \times \$ 10,000)+(28 \% \times \$ 30,000)+(33 \% \times \$ 4,000) $
C) $ (0 \% \times \$ 10,000)+(28 \% \times \$ 30,000)+(33 \% \times \$ 4,000) $.
D) $ (15 \% \times \$ 40,000)+(33 \% \times \$ 4,000) $.
E)None of the ahove

Accepted Answer

The answer of Perry is in the 33% tax bracket....

Question 13

Warren, age 17, is claimed as a dependent by his father. In 2014, Warren has dividend income of $1,500 and earns $400 from a part-time job.
a. What is Warren's taxable income for 2014?
b. Suppose Warren earned $1,200 (not $400) from the part­time job. What is Warren's taxable income for 2014?

Accepted Answer

The answer of Warren, age 17, is claimed as a...

Question 14

Taylor had the following transactions for 2014:
  
What is Taylor's AGI for 2014?

Accepted Answer

The answer of Taylor had the following transactions for 2014:
...

Question 15

During 2014, Addison has the following gains and losses:
 $\begin{array}{lr}
\text { LTCG } & \$ 10,000 \
\text { LTCL } & 3,000 \
\text { STCG } & 2,000 \
\text { STCL } & 7,000
\end{array}$ 
a. How much is Addison's tax liability if she is in the 15% tax bracket?
b. If her tax bracket is 33% (not 15%)?

Accepted Answer

The answer of During 2014, Addison has the following gains...

Question 16

Emily had the following transactions during 2014:
  
What is Emily's AGI for 2014?

Accepted Answer

The answer of Emily had the following transactions during 2014:
...

Question 17

During the year, Irv had the following transactions:
 $\begin{array}{llr}
  \text {Long-term loss on the sale of business use equipment  } &\$7,000\
 \text {  Long-term loss on the sale of personal use camper} &6,000\
 \text {Long-term gain on the sale of personal use boat  } &3,000\
 \text { Short-term loss on the sale of stock investment } &4,000\
 \text {Long-term loss on the sale of land investment  } &5,000\
\end{array}$
 
How are these transactions handled for income tax purposes?

Accepted Answer

The answer of During the year, Irv had the following...

Question 18

During 2014, Trevor has the following capital transactions:
$\begin{array}{lr}
\text { LTCG } & \$ 6,000 \
\text { Long-term collectible gain } & 2,000 \
\text { STCG } & 4,000 \
\text { STCL } & 10.000
\end{array}$
After the netting process, the following results:
A) Long-term collectible gain of $2,000.
B) LTCG of $6,000, Long-term collectible gain of $2,000, and a STCL of $6,000.
C) LTCG of $6,000, Long-term collectible gain of $2,000, and a STCL carryover to 2015 of $3,000.
D) LTCG of $2,000.
E) None of the above.

Accepted Answer

The answer of During 2014, Trevor has the following capital...

Question 19

In 2014, Ashley earns a salary of $55,000, has capital gains of $3,000, and receives interest income of $5,000. Her husband died in 2013. Ashley has a dependent son, Tyrone, who is age 8. Her itemized deductions are $9,000.
a. Calculate Ashley's taxable income for 2014.
b. What is her filing status?

Accepted Answer

The answer of In 2014, Ashley earns a salary of...

Question 20

Edgar had the following transactions for 2014:
  
What is Edgar's AGI for 2014?

Accepted Answer

The answer of Edgar had the following transactions for 2014:
...

Quiz 3: Computing the Tax

Meg, age 23, is a full-time law student and is claimed by her parents as a dependent. During 2014, she received $1,400 interest income from a bank savings account and $6,000 from a parttime job. What is Meg's taxable income for 2014?

Heloise, age 74 and a widow, is claimed as a dependent by her daughter. For 2014, she had income as follows: $2,500 interest on municipal bonds; $3,200 Social Security benefits; $3,000 income from a part-time job; and $2,800 dividends on stock investments. What is Heloise's taxable income for 2014?

During 2014, Madison had salary income of $80,000 and the following capital transactions: $\begin{array}{lr}\text { LTCG } & \$ 13,000 \\\text { LTCL } & 15,000 \\\text { STCG } & 13,000 \\\text { STCL } & 6,000\end{array}$ How are these transactions handled for income tax purposes?

In 2014, Tom is single and has AGI of $50,000. He is age 70, has no dependents, and has itemized deductions (i.e., from AGI) of $7,000. Determine Tom's taxable income for 2014.

During the year, Kim sold the following assets: business auto for a $1,000 loss, stock investment for a $1,000 loss, and pleasure yacht for a $1,000 loss. Presuming adequate income, how much of these losses may Kim claim?

Warren, age 17, is claimed as a dependent by his father. In 2014, Warren has dividend income of $1,500 and earns $400 from a part-time job. a. What is Warren's taxable income for 2014? b. Suppose Warren earned $1,200 (not $400) from the parttime job. What is Warren's taxable income for 2014?

Taylor had the following transactions for 2014: What is Taylor's AGI for 2014?

Emily had the following transactions during 2014: What is Emily's AGI for 2014?

During 2014, Trevor has the following capital transactions: $\begin{array}{lr}\text { LTCG } & \$ 6,000 \\\text { Long-term collectible gain } & 2,000 \\\text { STCG } & 4,000 \\\text { STCL } & 10.000\end{array}$ After the netting process, the following results:

In 2014, Ashley earns a salary of $55,000, has capital gains of $3,000, and receives interest income of $5,000. Her husband died in 2013. Ashley has a dependent son, Tyrone, who is age 8. Her itemized deductions are $9,000. a. Calculate Ashley's taxable income for 2014. b. What is her filing status?

Edgar had the following transactions for 2014: What is Edgar's AGI for 2014?

Quiz 3: Computing the Tax

Meg, age 23, is a full-time law student and is claimed by her parents as a dependent. During 2014, she received $1,400 interest income from a bank savings account and $6,000 from a part­time job. What is Meg's taxable income for 2014?

Heloise, age 74 and a widow, is claimed as a dependent by her daughter. For 2014, she had income as follows: $2,500 interest on municipal bonds; $3,200 Social Security benefits; $3,000 income from a part-time job; and $2,800 dividends on stock investments. What is Heloise's taxable income for 2014?

In 2014, Tom is single and has AGI of $50,000. He is age 70, has no dependents, and has itemized deductions (i.e., from AGI) of $7,000. Determine Tom's taxable income for 2014.

During the year, Kim sold the following assets: business auto for a $1,000 loss, stock investment for a $1,000 loss, and pleasure yacht for a $1,000 loss. Presuming adequate income, how much of these losses may Kim claim?

Warren, age 17, is claimed as a dependent by his father. In 2014, Warren has dividend income of $1,500 and earns $400 from a part-time job. a. What is Warren's taxable income for 2014? b. Suppose Warren earned $1,200 (not $400) from the part­time job. What is Warren's taxable income for 2014?

Taylor had the following transactions for 2014: What is Taylor's AGI for 2014?

Emily had the following transactions during 2014: What is Emily's AGI for 2014?

Edgar had the following transactions for 2014: What is Edgar's AGI for 2014?

Meg, age 23, is a full-time law student and is claimed by her parents as a dependent. During 2014, she received $1,400 interest income from a bank savings account and $6,000 from a parttime job. What is Meg's taxable income for 2014?

Warren, age 17, is claimed as a dependent by his father. In 2014, Warren has dividend income of $1,500 and earns $400 from a part-time job. a. What is Warren's taxable income for 2014? b. Suppose Warren earned $1,200 (not $400) from the parttime job. What is Warren's taxable income for 2014?