Questions from Federal Taxation


Q: In 2021, Santiago and Amy are married and file a joint

In 2021, Santiago and Amy are married and file a joint tax return. They have three dependent children, ages 12, 14, and 19. All parties are U.S. citizens. The couple’s AGI is $140,000. Determine any a...

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Q: In 2021, Ivanna, who has three children under age 13

In 2021, Ivanna, who has three children under age 13, worked full-time while her spouse, Sergio, was attending college for nine months during the year. Ivanna earned $47,000 and incurred $6,400 of chi...

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Q: Ava and her husband, Leo, file a joint return and

Ava and her husband, Leo, file a joint return and are in the 24% tax bracket in 2021. Ava’s employer offers a child and dependent care reimbursement plan that allows up to $5,000 of qualifying expense...

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Q: On July 1, 2021, Katrina purchased tax-exempt bonds

On July 1, 2021, Katrina purchased tax-exempt bonds (face value of $75,000) for $82,000. The bonds mature in five years, and the annual interest rate is 3%. a. How much interest income and/or interest...

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Q: Suki and Dave each purchase 100 shares of stock of Burgundy,

Suki and Dave each purchase 100 shares of stock of Burgundy, Inc., a publicly owned corporation, in July for $10,000 each. Suki sells her stock on December 31 for $8,000. Because Burgundy’s stock is l...

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Q: Peyton sells an office building and the associated land on May 1

Peyton sells an office building and the associated land on May 1 of the current year. Under the terms of the sales contract, Peyton is to receive $1,600,000 in cash. The purchaser is to assume Peyton’...

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Q: Noah Yobs, who has $62,000 of AGI (

Noah Yobs, who has $62,000 of AGI (solely from wages) before considering rental activities, has $70,000 of losses from a real estate rental activity in which he actively participates. He also actively...

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Q: Amee moved to the San Francisco Bay Area to work for a

Amee moved to the San Francisco Bay Area to work for a technology startup 25 years ago. The startup eventually went public, and Amee is now one of the company’s most senior and successful employees. A...

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Q: During the year, Rachel earned $18,000 of interest

During the year, Rachel earned $18,000 of interest income on private activity bonds that she had purchased in 2016. She also incurred interest expense of $7,000 in connection with amounts borrowed to...

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Q: Thelma inherited land from Sadie on June 7, 2021. The

Thelma inherited land from Sadie on June 7, 2021. The land appreciated in value by 100% during the six months Sadie owned it. The value has remained stable during the three months Thelma has owned it,...

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