80.2K

Verified Solution

Link Copied!

50. Allen has taxable income of $75,475 for 2018. Using the Tax Rate Schedules in the Appendix, compute Allen's income tax liability before tax credits and prepayments for each of the following filing statuses. (a) Married filing jointly (b) Married filing separately (c) Single (d) Head of household 56. Mr. Smith died early in the year. Mrs. Smith remarried in December and, therefore, was unable to file a joint return with Mr. Smith. What is the filing status of the decedent, Mr. Smith? (a) Single () Married filing separate (c) Married filing joint (d) Head of household (e) Surviving spouse 57. Which of the following is not considered when determining the total support test for a child? (a) Fair rental value of lodging (b) Medical insurance premiums (c) Birthday presents (d) 58. Which relative does not have to live in the same household of the taxpayer claiming head of household filing status? (a) Aunt (b) Son (c) Granddaughter (d) Father (e) Brother 59. To qualify for head of household rates, which of the following must be present? (a) You must be unmarried on the last day of your tax year (b) You must maintain a household and contribute over 50% of the cost of maintaining the household (c) The person for whom the household is maintained must be a relative (d) a and b (e) All of the above 61.Richard and Jennifer were married in 2009. They have a five-year-old child and a son born November 15,2018. Richard's 67-year-old father lived in a nursing home until his death on May 23, 2018. Richard and Jennifer provided all of his support until his death. Richard earned $43,000 in salary during the year. They also received $2,100 in interest from the credit union. They incurred $17,000 in itemized deductions during the year. Compute Richard and Jennifer's income tax for 2018 using the Tax Rate Schedules. Ch4 23. Fred Miller, a teacher, had several additional sources of income during 2018. He received a $500 gift as a result of helping a friend build a house, and he was assigned $300 of interest due on bonds his uncle owns. He also had the use of a van (value of $1,000) for the year from his parents who were traveling. Further, he received free, $600 of gasoline for the van because he tutored the son of the station owner free of charge. What of the additional income must be included in his income tax return? 24. Helen Troy, a student seeking a Master's degree in accounting, was awarded a 50 percent scholarship to graduate school (valued at $3,000) and a $6,000 per year teaching assistantship (not required of Master's level students). She also, because of her great beauty, won first prize in the Miss International Beauty Pageant. The prize included $14,000 in cash, a $25,000 car, a $10,00 scholarship, and travel expenses of $2,000 relating to the pageant. What must she include as gross income? 27. Judd Harrison owns 200 shares of stock in the Widget Company for which he paid $1,600 in 1999. The board of directors of the company decided to pay a 10 percent stock dividend in April 2018, for which Judd received 20 shares of stock. Was this a taxable stop dividend? Explain. 28. Joe and Mabel, a married couple filing a joint return, have modified adjusted gross income of $385,000. Included in this sum is $100,000 of net investment income. Are Joe and Mabel subject to the 3.8 percent Net Investment Income Tax? 29. Abby is a singe taxpayer with $250,000 of modified adjusted gross income which includes 80,000 of net investment income. Abby owes 3.8 percent Net Investment Income Tax on what amount of her income? 30. In January 2019, Judd Harrison decides to sell 100 shares in the Widget Company. Since April 2018, no stock dividends have been paid to the company. On the date the stock is sold the market price is $12 a share. What is the basis per share that Judd must use in computing any gains or losses? (Refer problem 27) 32. For each independent situation, determine the amount, if any, that is includible in the gross income of the employee. 32. For each independent situation, determine the amount, if any, that is includible in the gross income of the employee. a. The employee of a motel has the choice of free lodging on the premises (fair market value . $400 per week) or extra cash compensation. He is not required to live on premises. He chooses lodging. b. An employees arranges to have his annual bonus, $1,000, paid directly to his son. His objective is to make a wedding gift to the son. c. An employees garns a salary of $500 per week. Pursuant to a court order, $100 of his salary goes to his ex-wife for child support. 36. Roy Rainer will pay his wife, Mae, alimony according to the following schedule: Year 1 $50,000, year 2 $40,000, year 3 $20,000. Roy and Mae were divorced on January 6, 2018. For the first three years of the agreement, what portions are excludable and includible in Mae's gross income? 40. Robert Reed, a bachelor, maintains his parents in a nursing home. They have no income of their own and are completely dependent on their son. His parents are 75 and 72 years old. Robert has the following sources of income: Salary $70,000, Interest on municipal bonds $750 Interest on bank accounts $800, dividends of common stock of U.S. corporation $500. Robert has itemized deductions of $19.000, Robert owns several apartment buildings. His net rental income was $3,000 for the year. Then, on December 31, one of his tenants brought in a check for $500. This money covers the months of December and January. Robert is confused on how to account for this rental income. It is not included in the $3,000 listed above. Compute Robert's taxable income. 44. Mr. Garcia, a cash-basis taxpayer, owns an apartment building. His records reflect the following for 2018: security deposits tobe returned to tenants upon expiration of their leases in 2020 $1,350, advance rents received in December for the first six months of 2019 $3,000. What is the amount of gross rental income Mr. Garcia should include in his gross income? (a) $2,300 (b) $3,000 (c) $3,950 (d) $4,350 (e) $5,300 ant G paid cost of poor repairs that were Mr. Garcia's responsibility $950

Answer & Explanation Solved by verified expert

See Answer