All Related Questions of Itemized Deductions

Q: Camille Sikorski was divorced last year. She currently owns and provides

Camille Sikorski was divorced last year. She currently owns and provides a home for her 15-year-old daughter, Kaly, and 18-year-old son, Parker. Both children lived in Camille’s home for the entire ye...

Q: Marc and Michelle are married and earned salaries this year of $

Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corpo...

Q: Demarco and Janine Jackson have been married for 20 years and have

Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine, Michael, and Candice). The couple received salary income of $100,000...

Q: Through November, Tex has received gross income of $120,

Through November, Tex has received gross income of $120,000. For December, Tex is considering whether to accept one more work engagement for the year. Engagement 1 will generate $7,000 of revenue at a...

Q: Rank the following three single taxpayers in order of the magnitude of

Rank the following three single taxpayers in order of the magnitude of taxable income (from lowest to highest) and explain your results.

Q: Ken is 63 years old and unmarried. He retired at age

Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this...

Q: Louis files as a single taxpayer. In April of this year

Louis files as a single taxpayer. In April of this year he received a $900 refund of state income taxes that he paid last year. How much of the refund, if any, must Louis include in gross income under...

Q: L. A. and Paula file as married taxpayers. In

L. A. and Paula file as married taxpayers. In August of this year they received a $5,200 refund of state income taxes that they paid last year. How much of the refund, if any, must L. A. and Paula inc...

Q: Describe the types of expenses that constitute miscellaneous itemized deductions and explain

Describe the types of expenses that constitute miscellaneous itemized deductions and explain why these expenses rarely produce any tax benefits.

Q: Identify which itemized deductions are subject to floor limitations, ceiling limitations

Identify which itemized deductions are subject to floor limitations, ceiling limitations, or some combination of these limits.

Q: Describe the tax benefits from “bunching” itemized deductions in one

Describe the tax benefits from “bunching” itemized deductions in one year. Describe the characteristics of the taxpayers who are most likely to benefit from using bunching and explain why this is so....

Q: Explain why the overall phase-out of itemized deductions has been

Explain why the overall phase-out of itemized deductions has been described as a “haircut” of itemized deductions. Explain whether it is possible for a taxpayer to lose all their itemized deductions u...

Q: Explain why Congress allows self-employed taxpayers to deduct the cost

Explain why Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for AGI) when employees can only itemize this cost as a medical expense. Would a self-employ...

Q: Simpson is a single individual who is employed full-time by

Simpson is a single individual who is employed full-time by Duff Corporation. This year Simpson reports AGI of $50,000 and has incurred the following medical expenses:...

Q: Charles has AGI of $50,000 and has made the

Charles has AGI of $50,000 and has made the following payments related to (1) land he inherited from his deceased aunt and (2) a personal vacation taken last year. Calculate the amount of taxes Charl...

Q: Dan has AGI of $50,000 and paid the following

Dan has AGI of $50,000 and paid the following taxes during this tax year. Calculate the amount of taxes Dan may include in his itemized deductions for the year. State income tax withholding ………………...

Q: During 2016, your clients, Mr. and Mrs. Howell

During 2016, your clients, Mr. and Mrs. Howell, owned the following investment assets: a. Go to the IRS web site (www.IRS.gov) and download the most current version of Form 8949 and Schedule D. Use Fo...

Q: In 2016, Jeff, who is single, is entitled to

In 2016, Jeff, who is single, is entitled to the following deductions before phase-outs: State income taxes………………………………….$7,850 Real estate taxes……………………………………….1,900 Home mortgage interest……………………...

Q: John and Sandy Ferguson got married eight years ago and have a

John and Sandy Ferguson got married eight years ago and have a seven-year old daughter Samantha. In 2016, John worked as a computer technician at a local university earning a salary of $52,000, and Sa...

Q: Matt and Carrie are married, have two children, and file

Matt and Carrie are married, have two children, and file a joint return. Their daughter Katie is 19 years old and was a full-time student at State University. During 2016, she completed her freshman y...

Q: In 2016, Deon and NeNe are married filing jointly. They

In 2016, Deon and NeNe are married filing jointly. They have three dependent children under 18 years of age. Deon and NeNe’s AGI is $811,300, their taxable income is $720,250, and they itemize their d...

Q: In 2016, Nadia has $100,000 of regular taxable

In 2016, Nadia has $100,000 of regular taxable income. She itemizes her deductions as follows: real property taxes of $1,500, state income taxes of $2,000, and mortgage interest expense of $10,000 (no...

Q: Barbi really wants to acquire an expensive automobile (perhaps more expensive

Barbi really wants to acquire an expensive automobile (perhaps more expensive than she can really afford). She has two options. Option 1: finance the purchase with an automobile loan from her local ba...

Q: In year 1, Peter and Shaline Johnsen moved into a home

In year 1, Peter and Shaline Johnsen moved into a home in a new subdivision. Theirs was one of the first homes in the subdivision. In year 1, they paid $1,500 in real property taxes on the home to the...

Q: Jesse Brimhall is single. In 2016, his itemized deductions were

Jesse Brimhall is single. In 2016, his itemized deductions were $4,000 before considering any real property taxes he paid during the year. Jesse’s adjusted gross income was $70,000 (also before consid...

Q: Craig and Karen Conder purchased a new home on May 1 of

Craig and Karen Conder purchased a new home on May 1 of year 1 for $200,000. At the time of the purchase, it was estimated that the real property tax rate for the year would be one percent of the prop...

Q: Kirk and Lorna Newbold purchased a new home on August 1 of

Kirk and Lorna Newbold purchased a new home on August 1 of year 1 for $300,000. At the time of the purchase, it was estimated that the real property tax rate for the year would be .5 percent of the pr...

Q: Assume Natalie uses the IRS method of allocating expenses to rental use

Assume Natalie uses the IRS method of allocating expenses to rental use of the property. a. What is the total amount of for AGI (rental) deductions Natalie may deduct in the current year related to th...

Q: Assume Natalie uses the Tax Court method of allocating expenses to rental

Assume Natalie uses the Tax Court method of allocating expenses to rental use of the property. a. What is the total amount of for AGI (rental) deductions Natalie may deduct in the current year related...

Q: Rex incurred $8,000 of employment-related meal and

Rex incurred $8,000 of employment-related meal and entertainment expenses during the year. Rex’s employer is trying to determine whether to reimburse Rex directly for the expenses (and claim the $4,00...

Q: Randy deducted a high level of itemized deductions two years ago relative

Randy deducted a high level of itemized deductions two years ago relative to his income level. He recently received an IRS notice requesting documentation for his itemized deductions. What audit proce...

Q: How do taxpayers determine whether they should deduct their itemized deductions or

How do taxpayers determine whether they should deduct their itemized deductions or utilize the standard deduction?

Q: Compute 2017 taxable income in each of the following independent situations.

Compute 2017 taxable income in each of the following independent situations. a. Drew and Meg, ages 40 and 41, respectively, are married and file a joint return. In addition to four dependent children,...

Q: Using the Tax Rate Schedules, compute the 2017 tax liability for

Using the Tax Rate Schedules, compute the 2017 tax liability for Charlotte. Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children, who live with her. Char...

Q: Each year, Tom and Cindy Bates report itemized deductions of $

Each year, Tom and Cindy Bates report itemized deductions of $10,000, including a $4,000 pledge payment to their church. Upon the advice of a friend, they do the following: in early January 2017, they...

Q: Daniel B. Butler and Freida C. Butler, husband and

Daniel B. Butler and Freida C. Butler, husband and wife, file a joint return. The Butlers live at 625 Oak Street in Corbin, KY 40701. Dan’s Social Security number is 111-11-1112, and...

Q: Myrna and Geoffrey filed a joint tax return in 2016. Their

Myrna and Geoffrey filed a joint tax return in 2016. Their AGI was $85,000, and itemized deductions were $13,700, which included $4,000 in state income tax. In 2017, they received a $1,800 refund of t...

Q: Alfred E. Old and Beulah A. Crane, each age

Alfred E. Old and Beulah A. Crane, each age 42, married on September 7, 2014. Alfred and Beulah will file a joint return for 2016. Alfred’s Social Security number is 111-11-1112. Beulah’s Social Secur...

Q: Martin S. Albert (Social Security number 111-11-

Martin S. Albert (Social Security number 111-11-1111) is 39 years old and is married to Michele R. Albert (Social Security number 123-45-6789). The Alberts live at 512 Ferry Road, Newport News, VA 236...

Q: Dolly is a cash basis taxpayer. In 2017, she filed

Dolly is a cash basis taxpayer. In 2017, she filed her 2016 South Carolina income tax return and received a $2,200 refund. Dolly took the standard deduction on her 2016 Federal income tax return, but...

Q: Paul and Sonja, who are married, reported 2017 itemized deductions

Paul and Sonja, who are married, reported 2017 itemized deductions of $8,200 and $400, respectively. Paul suggests that they file their Federal income tax returns separately—he will itemize his deduct...

Q: How does the tax benefit rule apply in the following cases?

How does the tax benefit rule apply in the following cases? a. In 2015, the Orange Furniture Store, an accrual method taxpayer, sold furniture on credit for $1,000 to Sammy. The cost of the furniture...

Q: John and Mary Jane Diaz are married, filing jointly. Their

John and Mary Jane Diaz are married, filing jointly. Their address is 204 Shoe Lane, Blacksburg, VA 24061. John is age 35, and Mary Jane is age 30. They are expecting their first child in early 2018....

Q: For tax purposes, “gross income” is all the money

For tax purposes, “gross income” is all the money a person receives in a given year from any source. But income taxes are levied on “taxable income” rather than gross income. The difference between th...

Q: Jim and Pat are married and file jointly. In 2017,

Jim and Pat are married and file jointly. In 2017, Jim earned a salary of $46,000. Pat is self-employed. Her gross business income was $49,000 and her business expenses totaled $24,000. Each contribut...

Q: Jan, a single taxpayer, has adjusted gross income of $

Jan, a single taxpayer, has adjusted gross income of $250,000, medical expenses of $10,000, home mortgage interest of $3,000, property taxes of $2,000. and miscellaneous itemized deductions of $3,500....

Q: Georgia, a single taxpayer, operates a business that produces $

Georgia, a single taxpayer, operates a business that produces $100,000 of income before any amounts are paid to her. She has no dependents and no other income. She has itemized deductions of $18,000....

Q: Bob and Anna are in the 39.6% tax bracket

Bob and Anna are in the 39.6% tax bracket for ordinary income and the 20% bracket for capital gains (ignore the 3.8% additional tax on investment income for higher-income taxpayers.) They have owned s...

Q: Virginia is a cash-basis, calendar-year taxpayer.

Virginia is a cash-basis, calendar-year taxpayer. Her salary is $20,000, and she is single. She plans to purchase a residence in 2018. She anticipates her property taxes and interest will total $7,200...

Q: Maria is a single taxpayer. Her salary is $51,

Maria is a single taxpayer. Her salary is $51,000. Maria realized a short-term capital loss of $5,000. Her itemized deductions total $4,000. a. Compute Maria’s adjusted gross income. b. Compute her t...

Q: Jack is starting a business that he expects to produce $60

Jack is starting a business that he expects to produce $60,000 of income this year before compensating Jack for his services. He has $1,000 of other income and itemized deductions totaling $10,000. He...

Q: Gary earned $57,000 as an executive. Gary,

Gary earned $57,000 as an executive. Gary, who is single, supported his half sister, who lives in a nursing home. Gary received the following interest: $400 on City of Los Angeles bonds, $200 on a mon...

Q: Kamal is starting a new business which will operate as an S

Kamal is starting a new business which will operate as an S corporation. This means that income earned by the corporation will be reported by shareholders even if they do not receive distributions. Ka...

Q: The following information relates to Tom, a single taxpayer, age

The following information relates to Tom, a single taxpayer, age 18: Salary $1,800 Taxable interest income 1,600 Itemized deductions 600 a. Compute Tom’s taxable income assuming he is self-supporting...

Q: Bryce, a bank official, is married and files a joint

Bryce, a bank official, is married and files a joint return. During 2017 he engages in the following activities and transactions: a. Being an avid fisherman, Bryce develops an expertise in tying flie...

Q: For 2017, Mario, a single individual with no dependents,

For 2017, Mario, a single individual with no dependents, receives income of $55,000 and incurs deductible expenses of $9,000. a. What is Mario’s taxable income assuming that the expenses are deductio...

Q: Sally and Tom are married, have three dependent children, and

Sally and Tom are married, have three dependent children, and file a joint return in 2017. If they have adjusted gross income (AGI) of $90,000 and itemized deductions of $10,000, what is their taxable...

Q: a. Keith Thomas and Thomas Brooks began a new consulting business

a. Keith Thomas and Thomas Brooks began a new consulting business on January 1, 2017. They organized the business as a C corporation, KT, Inc. During 2017, the corporation was successful and generated...

Q: Bill and Mary plan to marry in December 2017. Bill’s salary

Bill and Mary plan to marry in December 2017. Bill’s salary is $32,000 and he owns his residence. His itemized deductions total $12,000. Mary’s salary is $39,000. Her itemized deductions total only $1...

Q: Which of the following individuals is most likely to be audited?

Which of the following individuals is most likely to be audited? a.Connie has a $20,000 net loss from her unincorporated business (a cattle ranch). She also received a $200,000 salary as an executive...

Q: The following information relates to two married couples: /

The following information relates to two married couples: Compute the 2017 tax due or refund due for each couple. Assume that the itemized deductions have been reduced by the applicable floors. Ignore...

Q: Carl and Carol have salaries of $14,000 and $

Carl and Carol have salaries of $14,000 and $22,000, respectively. Their itemized deductions total $8,500. They are married and both are under age 65. a. Compute their taxable income assuming they fi...

Q: Matt, who is single, always has elected to itemize deductions

Matt, who is single, always has elected to itemize deductions rather than take the standard deduction. In prior years, his itemized deductions always exceeded the standard deduction by a substantial a...

Q: Wolfgang is age 33. His AGI is $125,000

Wolfgang is age 33. His AGI is $125,000. He reports the following itemized deductions for the year. Medical expenses [$15,000 _ (10% _ $125,000)]......................................$2,500 State inc...

Q: Gabriel, age 40, and Emma, age 33, are

Gabriel, age 40, and Emma, age 33, are married with two dependents. They reported AGI of $110,000 for the year, including net investment income of $3,000 and gambling winnings of $2,500. They incurre...

Q: Jane and Robert Brown are married and have eight children, all

Jane and Robert Brown are married and have eight children, all of whom are eligible to be claimed as the couple’s dependents. Robert earns $94,000 working as an accountant, and Jane earns $38,000 as a...

Q: Evan is single and has AGI of $277,300 in

Evan is single and has AGI of $277,300 in 2017. His potential itemized deductions before any limitations for the year total $52,300 and consist of the following: Medical expenses (before the 10%-of-A...

Q: Pedro, who is a single taxpayer, had AGI of $

Pedro, who is a single taxpayer, had AGI of $328,000 for 2017. He incurred the following expenses during the year: Medical expenses before 10%-of-AGI Limitation…………………………………………………$12,000 State and lo...

Q: Linda, who files as a single taxpayer, had AGI of

Linda, who files as a single taxpayer, had AGI of $280,000 for 2017. She incurred the following expenses and losses during the year: Medical expenses (before the 10%-of-AGI limitation)……………………………..$3...

Q: For calendar year 2017, Stuart and Pamela Gibson file a joint

For calendar year 2017, Stuart and Pamela Gibson file a joint return reflecting AGI of $350,000. Their itemized deductions Casualty loss after $100 floor (not covered by insurance)…………..$48,600 Home...

Q: Ken and Mary Jane Blough, your neighbors, have asked you

Ken and Mary Jane Blough, your neighbors, have asked you for advice after receiving correspondence in the mail from the IRS. You learn that the IRS is asking for documentation in support of the itemiz...

Q: Beth R. Jordan lives at 2322 Skyview Road, Mesa,

Beth R. Jordan lives at 2322 Skyview Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). She...

Q: Jayden, a calendar year taxpayer, paid $16,000

Jayden, a calendar year taxpayer, paid $16,000 in medical expenses and sustained a $20,000 casualty loss in 2017. He expects $12,000 of the medical expenses and $14,000 of the casualty loss to be reim...

Q: Tim and Sarah Lawrence are married and file a joint return.

Tim and Sarah Lawrence are married and file a joint return. Tim’s Social Security number is 123-45-6789, and Sarah’s Social Security number is 111-11-1112. They reside at 100 Olive Lane, Covington, LA...

Q: Tom and Alice Honeycutt, ages 35 and 36, respectively,

Tom and Alice Honeycutt, ages 35 and 36, respectively, live at 101 Glass Road, Delton, MI 49046. Tom is a county employee, and Alice is a self-employed accountant. Tom’s Social Security number is 111-...

Q: Norma, who is single and uses the cash method of accounting

Norma, who is single and uses the cash method of accounting, lives in a state that imposes an income tax. In April 2017, she files her state income tax return for 2016 and pays an additional $1,000 in...

Q: Issac has AGI of $73,400 and incurred the following

Issac has AGI of $73,400 and incurred the following expenses. How much of the business and personal expenditures are deductible (after any limitation) either as miscellaneous itemized deductions or as...

Q: : May an individual who is married and files a joint return

May an individual who is married and files a joint return deduct any charitable contributions if the itemized deductions total $7,000 (of which $3,000 are qualified charitable contributions)?

Q: List some of the more common miscellaneous itemized deductions and identify any

List some of the more common miscellaneous itemized deductions and identify any limitations that are imposed on the deductibility of these items.

Q: Other than the 10% limitation placed on medical expenses, the

Other than the 10% limitation placed on medical expenses, the 10% reduction for casualty losses on personal property, the 2% reduction applied to certain miscellaneous itemized deductions, and the fac...

Q: Chad is divorced and has custody of Brett, his 14-

Chad is divorced and has custody of Brett, his 14-year-old son. Chad’s ex-wife has custody of their daughter, Sara. During the year, Chad incurs $3,000 for orthodontic work for Sara to correct a sever...

Q: In 2017, Charla, a single taxpayer with no dependents,

In 2017, Charla, a single taxpayer with no dependents, was severely hurt in a farm accident. Charla is 38 years old. The accident left Charla’s legs 85% paralyzed. After incurring $14,000 of medical e...

Q: Dawn, a single, cash-method taxpayer, paid the

Dawn, a single, cash-method taxpayer, paid the following taxes in the current year: Dawn’s employer withheld $5,400 for federal income taxes, $2,000 for state income taxes, and $3,800 for FICA from he...

Q: During the current year, Rulon’s toilet overflowed because of a mechanical

During the current year, Rulon’s toilet overflowed because of a mechanical problem. Rulon was outside playing croquet, and by the time he returned, the water had flooded the basement, causing damage t...

Q: Assume the same facts as in Problem I:8-56

Assume the same facts as in Problem I:8-56, except in addition to the other itemized deductions Michelle and Mark suffer a $4,500 deductible personal casualty loss (after limitations). a. What is Mic...

Q: During 2017, Karen, a single taxpayer, reports the following

During 2017, Karen, a single taxpayer, reports the following income and expense items relating to her interior design business: Revenues………………………………….$52,000 Cost of goods sold……………………….41,000 Adverti...

Q: Mike incurs the following employment-related expenses in the current year

Mike incurs the following employment-related expenses in the current year: Actual automobile expenses……………………………………………$ 2,500 Moving expenses (deductible under Sec. 217)……………………4,000 Entertainment ex...

Q: In the current year, Mike’s AGI is $50,000

In the current year, Mike’s AGI is $50,000. Mike has no miscellaneous itemized deductions other than the employment-related expenses listed below. Mike attends a professional trade association convent...

Q: Maxine incurs the following employment-related business expenses in the current

Maxine incurs the following employment-related business expenses in the current year: Professional dues and subscriptions ………………………………………………….. $1,000 Airfare and lodging ……………………………………………………………………………...

Q: In the current year, Melissa, a single employee whose AGI

In the current year, Melissa, a single employee whose AGI is $100,000 before any of the items below, incurs the following expenses: Safe deposit box rental for investments ………………………...

Q: Which of the following are individual AMT adjustments? a.

Which of the following are individual AMT adjustments? a. Itemized deductions that are allowed for regular tax purposes but not allowed in computing AMTI. b. Excess of MACRS depreciation over deprec...

Q: Which of the following itemized deductions are deductible when computing the alternative

Which of the following itemized deductions are deductible when computing the alternative minimum tax for individuals? a. Charitable contributions b. Mortgage interest on a loan used to acquire a per...

Q: Nick and Nora are married and have three children in college.

Nick and Nora are married and have three children in college. They have an adjusted gross income of $47,400. If their standard deduction is $12,600, itemized deductions are $14,200, and they get an ex...

Q: Using the information in problem 10, if Nick and Nora’s itemized

Using the information in problem 10, if Nick and Nora’s itemized deductions increase by $2,000, how will their taxable income be affected?

Q: What are itemized deductions? How do itemized deductions relate to standard

What are itemized deductions? How do itemized deductions relate to standard deductions? Provide some examples of itemized deductions.

Q: You are in the process of doing income tax projections for the

You are in the process of doing income tax projections for the Estate of Esther Simmons, who died January 3, 2017. The Estate has paid appraisal fees for having her real estate holdings appraised for...

Q: On his individual return, Al reports salary and exemptions for himself

On his individual return, Al reports salary and exemptions for himself and seven dependents. His itemized deductions consist of mortgage interest, real estate taxes, and a large loss from breeding dog...

Q: Your client, Hank Goedert, earned $100,000 of

Your client, Hank Goedert, earned $100,000 of salary and received $40,000 of dividends in the current year. His itemized deductions total $37,000. In addition, Hank received $47,000 from a relative wh...

Q: Jane and Robert Brown are married and have eight children, all

Jane and Robert Brown are married and have eight children, all of whom are eligible to be claimed as the couple’s dependents. Robert earns $94,000 working as an accountant, and Jane earns $35,000 as a...

Q: Paul and Sonja, who are married, had itemized deductions of

Paul and Sonja, who are married, had itemized deductions of $8,200 and $400, respectively, during 2015. Paul suggests that they file separately—he will itemize his deductions from AGI, and she will cl...

Q: Compute the taxable income for 2015 in each of the following independent

Compute the taxable income for 2015 in each of the following independent situations: a. Drew and Meg, ages 40 and 41, respectively, are married and file a joint return. In addition to four dependent...

Q: Charlotte (age 40) is a surviving spouse and provides all

Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children who live with her. She also maintains the house- hold in which her parents live and furnished 60% of...

Q: Issac has AGI of $73,400 and incurred the following

Issac has AGI of $73,400 and incurred the following expenses. How much of the business and personal expenditures are deductible (after any limitation) either as miscellaneous itemized deductions or as...

Q: Pedro, who is a single taxpayer, had AGI of $

Pedro, who is a single taxpayer, had AGI of $328,000 for 2015. He incurred the following expenses during the year: Medical expenses before 10%-of-AGI limitation………………………………………… $12,000 State and loca...

Q: Norma, who uses the cash method of accounting, lives in

Norma, who uses the cash method of accounting, lives in a state that imposes an income tax. In April 2015, she files her state income tax return for 2014 and pays an additional $1,000 in state income...

Q: Linda, age 37, who files as a single taxpayer,

Linda, age 37, who files as a single taxpayer, had AGI of $280,000 for 2015. She incurred the following expenses and losses during the year: Medical expenses (before the 10%-of-AGI limitation) ………………...

Q: a. Assuming that Nick and Jolene have total allowable itemized deductions

a. Assuming that Nick and Jolene have total allowable itemized deductions of $13,350 in 2017 and that they have no dependents, determine their 2017 taxable income and tax liability based on the projec...

Q: Edna, 63, is a widow and works for Rhododendron Corporation

Edna, 63, is a widow and works for Rhododendron Corporation. Her annual salary is $40,000. Rhododendron provides the following benefits to all employees: • Medical insurance—The cost of Edna’s policy...

Q: Carol is a single mother who owns a wholesale auto parts distributorship

Carol is a single mother who owns a wholesale auto parts distributorship. The business is organized as a sole proprietorship. Her business has advanced, and she can no longer devote the time necessar...

Q: Manuel and Fernando own and operate an electronics store, Electronica,

Manuel and Fernando own and operate an electronics store, Electronica, as an S corporation. Manuel owns 70%, and Fernando owns 30%. For the current year, the store reports the following: Sales reven...

Q: Allison and Paul are married and have no children. Paul is

Allison and Paul are married and have no children. Paul is a lawyer who earns a salary of $80,000. In November 2016, Allison quit her job as a copy editor and began exploring the possibility of bree...

Q: Reba's 2017 income tax calculation is as follows: Gross

Reba's 2017 income tax calculation is as follows: Gross income……………………………………………………………………..$ 120,000 Deductions for adjusted gross income…………………………………….(3,000) Adjusted gross income…………………………………………………...

Q: Explain the operation of the itemized deduction phase-out. What

Explain the operation of the itemized deduction phase-out. What stops a taxpayer from losing all itemized deductions under the phase-out?

Q: Jacqueline is single. In June 2017, she receives a refund

Jacqueline is single. In June 2017, she receives a refund of $250 from her 2016 state tax return. Her 2016 itemized deductions were $8,000. In October 2017, her 2015 state tax return is audited, and...

Q: Simon is single and a stockbroker for a large investment bank.

Simon is single and a stockbroker for a large investment bank. During 2017, he has withheld from his paycheck $2,250 for state taxes and $400 for city taxes. In June 2018, Simon receives a state tax...

Q: Frank and Liz are married. During 2017, Frank has $

Frank and Liz are married. During 2017, Frank has $2,800 in state income taxes withheld from his paycheck, and Liz makes estimated tax payments totaling $2,200. In May 2018, they receive a state tax...

Q: Liang pays $12,000 in interest on debt which was

Liang pays $12,000 in interest on debt which was used to purchase portfolio investments. He receives $6,000 in interest from a certificate of deposit, $4,200 in royalties, and $2,000 in interest on m...

Q: Orley is a single individual with no dependents who has an adjusted

Orley is a single individual with no dependents who has an adjusted gross income of $279,000 in 2017. Orley's itemized deductions total $19,400, which includes $1,200 in deductible medical costs and...

Q: Jeff and Marion are married with 3 dependents. Their adjusted gross

Jeff and Marion are married with 3 dependents. Their adjusted gross income in 2017 is $338,300. Their itemized deductions total $34,600, including $4,900 in investment interest. a. What is their 2017...

Q: Determine the taxable income of each of the following dependents in 2017

Determine the taxable income of each of the following dependents in 2017: a. Louis is 12 and receives $1,250 in interest income. b. Jackson is 16. He earns $2,050 from his newspaper route and receiv...

Q: For each of the dependents in problem 63, calculate the income

For each of the dependents in problem 63, calculate the income tax on their taxable income. In each case, assume that their parents' taxable income is $128,000. Data from Problem 63: Determine the...

Q: Determine the maximum deduction from AGI in 2017 for each of the

Determine the maximum deduction from AGI in 2017 for each of the following taxpayers: a. Pedro is single and maintains a household for his father. His father is not a dependent of Pedro’s. Pedro’s i...

Q: Determine the maximum deduction from AGI in 2017 for each of the

Determine the maximum deduction from AGI in 2017 for each of the following taxpayers: a. Selen is single and has itemized deductions for the year of $6,500. In addition, Selen's mother lives with her...

Q: Hongtao is single and has a gross income of $89,

Hongtao is single and has a gross income of $89,000. His allowable deductions for adjusted gross income are $4,200 and his itemized deductions are $12,900. a. What is Hongtao’s taxable income and tax...

Q: Arthur and Cora are married and have 2 dependent children. They

Arthur and Cora are married and have 2 dependent children. They have a gross income of $95,000. Their allowable deductions for adjusted gross income total $4,000, and they have total allowable itemi...

Q: Lauren owns stock for which she paid $70,000 several

Lauren owns stock for which she paid $70,000 several years ago. She is considering donating the stock to the United Way. The fair market value of the stock is $80,000. Her adjusted gross income is...

Q: Machela, a single individual, owns all the stock in the

Machela, a single individual, owns all the stock in the Gordon Corporation, which reports taxable income of $55,000. The corporation distributes the $55,000 in earnings as a dividend. Machela also r...

Q: Harry and Matilda are married and have the following tax return data

Harry and Matilda are married and have the following tax return data for 2017: Do Harry and Matilda owe any income tax for 2017? Explain why they might owe tax in 2017 and discuss the items on their...

Q: Alice and Frank had the following items on their current-year

Alice and Frank had the following items on their current-year tax return: Determine the amount of the adjustments that Alice and Frank will have to make in computing their alternative minimum tax....

Q: Joan and Matthew are married, have two children, and report

Joan and Matthew are married, have two children, and report the following items on their current year’s tax return: Determine Joan and Matthew's regular tax liability and, if appli...

Q: Which of the following itemized deductions is not subject to the 2

Which of the following itemized deductions is not subject to the 2% limit on the Schedule A? a. Tax preparation fees. b. Safe deposit box fee. c. Gambling losses. d. Union dues and fees.

Q: Each of the following taxpayers received a state income tax refund in

Each of the following taxpayers received a state income tax refund in 2017. In all cases, the taxpayer has a filing status of married filing jointly. What amount of the refund is properly included in...

Q: Graciela, who is single, reported itemized deductions of $6

Graciela, who is single, reported itemized deductions of $6,400 on her 2016 tax return. Her itemized deductions included $200 of state taxes paid. In 22017, she received a $150 refund of state taxes...

Q: Hortencia is employed as an accountant for a large firm in San

Hortencia is employed as an accountant for a large firm in San Diego. During 2017, she paid the following miscellaneous expenses: Unreimbursed employee business expenses…………………………. $520 AICPA dues………...

Q: Give three examples of miscellaneous itemized deductions. How are miscellaneous itemized

Give three examples of miscellaneous itemized deductions. How are miscellaneous itemized deductions limited?

Q: What are the six types of personal expenses that can be classified

What are the six types of personal expenses that can be classified as itemized deductions on Schedule A, Form 1040?

Q: Leslie and Jason, who are married, paid the following expenses

Leslie and Jason, who are married, paid the following expenses during 2017: Interest on a car loan………………………………………………………. $ 100 Interest on lending institution loan...

Q: The majority of itemized deductions are: a. Business

The majority of itemized deductions are: a. Business expenses. b. Tax credits. c. Personal living expenses. d. None of the above.

Q: During 2017, Raul incurred and paid the following expenses:

During 2017, Raul incurred and paid the following expenses: Prescription drugs…………………………………………………………$ 470 Vitamins and over-the-counter cold remedies…………………..130 Doctors and dentist visits……………………………...

Q: Daryl, who had significant itemized deductions for 2017 and therefore was

Daryl, who had significant itemized deductions for 2017 and therefore was eligible to use Schedule A, purchased a new vehicle in 2017 for $40,000 with a state sales tax of 10%. The allocated deduction...

Q: During 201 Noriko paid the following taxes related to her home:

During 201 Noriko paid the following taxes related to her home: Real Estate property taxes on residence (paid from escrow account)……………..$1,800 State personal property tax on her automobile (based on...

Q: Carson had the following itemized deductions in 2017: State

Carson had the following itemized deductions in 2017: State income taxes………………………………………….$1,500 Charitable contributions……………………………………9,900 Mortgage interest (personal residence)……………12,000 Medical e...

Q: Jim (age 50) and Martha (age 49) are

Jim (age 50) and Martha (age 49) are married with three dependent children. They file a joint return for 2016. Their income from salaries totals $49,500, and they received $10,125 in taxable interest,...

Q: Frank, age 35, and Joyce, age 34, are

Frank, age 35, and Joyce, age 34, are married and file a joint income tax return for 2016. Their salaries for the year total $84,600 and they have taxable interest income of $3,900. They have no deduc...

Q: Jason and Mary are married taxpayers in 2016. They are both

Jason and Mary are married taxpayers in 2016. They are both under age 65 and in good health. For this tax year, they have a total of $41,000 in wages and $700 in interest income. Jason and Mary’s dedu...

Q: 1. The current income tax system was: a.

1. The current income tax system was: a. Designed solely to raise money to run the government b. Authorized by the founding fathers when the government was formed c. Not designed with social objective...

Q: Leslie is a single taxpayer who is under age 65 and in

Leslie is a single taxpayer who is under age 65 and in good health. For 2016, she has a salary of $24,000 and itemized deductions of $1,000. Leslie is entitled to one exemption on her tax return. a. H...

Q: Diego, age 28, married Dolores, age 27, in

Diego, age 28, married Dolores, age 27, in 2016. Their salaries for the year amounted to $47,230 and they had interest income of $3,500. Diego and Dolores’ deductions for adjusted gross income amounte...

Q: Ulysses and Penelope are married and file separate returns for 2016.

Ulysses and Penelope are married and file separate returns for 2016. Penelope itemizes her deductions on her return. Ulysses’ adjusted gross income was $17,400, his itemized deductions were $2,250, an...

Q: Alicia (age 27) is a single, full-time

Alicia (age 27) is a single, full-time college student. She earns $13,200 from a part time job and has taxable interest income of $1,450. Her itemized deductions are $845. Calculate Alicia’s taxable i...

Q: Michelle, a single individual, reports 2017 adjusted gross income of

Michelle, a single individual, reports 2017 adjusted gross income of $280,000 and has the following itemized deductions before applicable limitations: Medical expenses……………………………………………………………………………………...

Q: Jennifer, a single individual, has a $20,000

Jennifer, a single individual, has a $20,000 loss from an S corporation, $11,000 salary from a part-time job, and $2,000 of interest income. Her itemized deductions include $4,000 interest on the $100...

Q: Mario and Kaitlin are married and file a joint tax return.

Mario and Kaitlin are married and file a joint tax return. They have adjusted gross income of $385,000 that includes $4,700 of investment income ($3,000 short-term capital gains and $1,700 of corporat...

Q: Mark and Patricia report adjusted gross income of $380,500

Mark and Patricia report adjusted gross income of $380,500 and itemized deductions of $64,000 for the interest on their home acquisition mortgage (principal amount of $890,000), taxes, and charitable...

Q: How do alternative minimum tax itemized deductions differ from the regular income

How do alternative minimum tax itemized deductions differ from the regular income tax itemized deductions?

Q: Which itemized deductions must exceed a basic minimum (floor) before

Which itemized deductions must exceed a basic minimum (floor) before the taxpayer’s taxable income is reduced for the excess?

Q: Explain how itemized deductions are phased out. Can a taxpayer lose

Explain how itemized deductions are phased out. Can a taxpayer lose the benefit of all of his or her itemized deductions?

Q: Marlee, a single parent of one child for whom she claims

Marlee, a single parent of one child for whom she claims the exemption, has $15,000 in itemized deductions and files as head of household for 2017. Determine her taxable income if she has a salary of...

Q: Refer to the information in problem 35. Determine Marlee’s income tax

Refer to the information in problem 35. Determine Marlee’s income tax liability for 2017. From problem 35: Marlee, a single parent of one child for whom she claims the exemption, has $15,000 in itemi...

Q: Rebecca and Gregory, a married couple filing a joint return,

Rebecca and Gregory, a married couple filing a joint return, reported adjusted gross income of $70,000 and total allowable itemized deductions of $13,000, including $3,100 for state income taxes, in 2...

Q: Suzanne, who is a head of household, has the following

Suzanne, who is a head of household, has the following deductions before considering any phaseouts: Interest on qualified acquisition debt………$9,800 Real property taxes…………………………………..3,000 State incom...

Q: Juno Corporation had ordinary taxable income of $127,000 in

Juno Corporation had ordinary taxable income of $127,000 in the current year before consideration of any of the following property transactions. It sold two blocks of stock held for investment. One yi...

Q: 1. Which of the following expenses is deductible as an entertainment

1. Which of the following expenses is deductible as an entertainment expense? a. The depreciation on an airplane used to entertain customers b. The cost of a hunting camp used to entertain customers c...

Q: Steve and Sue are married with three dependent children. Their 2016

Steve and Sue are married with three dependent children. Their 2016 joint income tax return shows $389,000 of AGI and $60,000 of itemized deductions made up of $30,000 of state income taxes and $30,00...

Q: 1. The cost of which of the following expenses is not

1. The cost of which of the following expenses is not deductible as a medical expense on Schedule A, before the 10 percent of adjusted gross income limitation? a. A psychiatrist b. Botox treatment to...

Q: 1.Which of the following is correct for Qualified Tuition Programs

1.Which of the following is correct for Qualified Tuition Programs? a. Contributions are deductible, and qualified educational expense distributions are tax free. b. Contributions are not deductible,...

Q: Phan Mai is single with two dependent children under age 17.

Phan Mai is single with two dependent children under age 17. Phan estimates her wages for the year will be $36,000, will have $5,700 of dependent care expenses, and her itemized deductions will be $11...

Q: Ralph and Kathy Gump are married with one 20-year-

Ralph and Kathy Gump are married with one 20-year-old dependent child. Ralph earns a total of $39,000 and estimates their itemized deductions to be $16,000 for the year. Kathy is not employed. Use For...

Q: Rachel and Harry are planning to get married. Both have successful

Rachel and Harry are planning to get married. Both have successful careers and expect to earn the following this year. whether getting married will cost or save them money and how much. Assume that...

Q: You've been hired by the nation of Utopia to computerize its approach

You've been hired by the nation of Utopia to computerize its approach to calculating taxes. Utopia's progressive tax system contains only two brackets, which are applicable to all households. These...

Q: Kate Beckett and her two children, Austin and Alexandra, moved

Kate Beckett and her two children, Austin and Alexandra, moved into the home of her new husband, Richard Castle, in New York City. Kate is a novelist, and her husband is a police detective. The family...

Q: If you itemize your deductions, you may include certain expenses as

If you itemize your deductions, you may include certain expenses as part of your itemized deductions. Discuss five types of itemized deductions and the general rules that apply to them.

Q: Kendra Thayer, who is single, goes to graduate school part

Kendra Thayer, who is single, goes to graduate school part-time and works as a waitress at the Backwater Grill in New York. During the past year (2014), her gross income was $18,700 in wages and tips....

Q: Ms. Timmons, an unmarried individual, has the following income

Ms. Timmons, an unmarried individual, has the following income items. Schedule C net profit …………………………………..$31,900 NOL carry forward deduction ………………….…….(9,190) Interest income ……………………………………..…………....

Q: Mr. Perry is an unmarried individual with no dependent children.

Mr. Perry is an unmarried individual with no dependent children. He reports the following information. Wages ……………………………………………………………………….$65,000 Schedule C net profit ……………………………………………………..11,650 Int...

Q: Mr. Coleman, an unmarried individual, had the following income

Mr. Coleman, an unmarried individual, had the following income items. Interest income …………………………………………………$14,200 Ordinary loss from an S corporation ……………………..(8,400) Ordinary income from a partnersh...

Q: Mr. and Mrs. Ludwig had the following income items.

Mr. and Mrs. Ludwig had the following income items. Dividend eligible for 0% preferential rate ………………….$ 3,400 Capital gain eligible for 0% preferential rate …………………2,900 Mrs. Ludwig’s salary. ………………...

Q: Mr. Rogers, an unmarried individual, had the following income

Mr. Rogers, an unmarried individual, had the following income items. Salary ……………………………………………….$512,100 Interest income ……………………………………19,700 Dividend eligible for 20% rate ……………….31,000 Mr. Rogers h...

Q: Mr. and Mrs. Lovejoy are married with no dependent children

Mr. and Mrs. Lovejoy are married with no dependent children. Mr. Lovejoy worked for Smart Tech Corporation January through March and for Computer Associates the remainder of the year. Mrs. Lovejoy fin...

Q: Mr. and Mrs. Kigali’s AGI (earned income) was

Mr. and Mrs. Kigali’s AGI (earned income) was $14,610. Their federal income tax withholding was $850. They had no itemized deductions and two dependent children, ages 18 and 19. If Mr. and Mrs. Kigali...

Q: Ms. Noteboom, a single taxpayer, projects that she will

Ms. Noteboom, a single taxpayer, projects that she will incur about $13,500 of expenses qualifying as itemized deductions in both 2018 and 2019. Assuming that her standard deduction is $12,000 in both...

Q: Mr. and Mrs. Daku had the following income items.

Mr. and Mrs. Daku had the following income items. Mr. Daku’s salary ……………………………………..$52,500 Mrs. Daku’s Schedule C net profit ………………..41,800 Interest income …………………………………………….1,300 Mrs. Daku’s self-...

Q: Mr. and Mrs. Prinze are evaluating an investment in undeveloped

Mr. and Mrs. Prinze are evaluating an investment in undeveloped land. The year 0 cost is $100,000, and they can borrow $60,000 of the purchase price at 8 percent. They will pay interest only in years...

Q: Individuals who plan to bunch itemized deductions into one year can either

Individuals who plan to bunch itemized deductions into one year can either postpone the payment of expenses from an earlier year or accelerate the payment of expenses from a later year. Which techniqu...

Q: Historically, about 1 percent of Form 1040s are audited. Why

Historically, about 1 percent of Form 1040s are audited. Why does a Form 1040 reflecting $31,000 AGI and a standard deduction have much less than a 1 percent chance, while a Form 1040 reflecting $912,...

Q: Mr. and Mrs. Remy have the following allowable itemized deductions

Mr. and Mrs. Remy have the following allowable itemized deductions this year. Medical expenses……………………………………..$2,310 State and local taxes……………………………………4,019 Casualty loss………………………………………………8,000 Char...

Q: Louis files as a single taxpayer. In April of this year

Louis files as a single taxpayer. In April of this year he received a $900 refund of state income taxes that he paid last year. How much of the refund, if any, must Louis include in gross income under...

Q: Simpson, age 45, is a single individual who is employed

Simpson, age 45, is a single individual who is employed full-time by Duff Corporation. This year Simpson reports AGI of $50,000 and has incurred the following medical expenses: a. Calculate the amou...

Q: L. A. and Paula file as married taxpayers. In

L. A. and Paula file as married taxpayers. In August of this year they received a $5,200 refund of state income taxes that they paid last year. How much of the refund, if any, must L. A. and Paula inc...

Q: Marc and Michelle are married and earned salaries this year of $

Marc and Michelle are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corpo...

Q: Demarco and Janine Jackson have been married for 20 years and have

Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine, Michael, and Candice). The couple received salary income of $100,000...

Q: Camille Sikorski was divorced last year. She currently owns and provides

Camille Sikorski was divorced last year. She currently owns and provides a home for her 15-year-old daughter. Kaly lived in Camille’s home for the entire year and Camille paid for all the costs of mai...

Q: During 2018, your clients, Mr. and Mrs. Howell

During 2018, your clients, Mr. and Mrs. Howell, owned the following investment assets: Investment Assets Date Acquired Purchase Price Broker’s Commission Paid at Time of Purchase  300 shares of...

Q: Ken is 63 years old and unmarried. He retired at age

Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information t...

Q: John and Sandy Ferguson got married eight years ago and have a

John and Sandy Ferguson got married eight years ago and have a seven-year-old daughter Samantha. In 2018, John worked as a computer technician at a local university earning a salary of $152,000, and S...

Q: In 2018, Nadia has $100,000 of regular taxable

In 2018, Nadia has $100,000 of regular taxable income. She itemizes her deductions as follows: real property taxes of $1,500, state income taxes of $2,000, and mortgage interest expense of $10,000 (ac...

Q: Peter and Shaline Johnsen moved into a home in a new subdivision

Peter and Shaline Johnsen moved into a home in a new subdivision. Theirs was one of the first homes in the subdivision. During the year, they paid $1,500 in real property taxes on the home to the stat...

Q: Jesse Brimhall is single. In 2018, his itemized deductions were

Jesse Brimhall is single. In 2018, his itemized deductions were $9,000 before considering any real property taxes he paid during the year. Jesse’s adjusted gross income was $70,000 (also before consid...

Q: J\1ario, a single taxpayer with two dependent children,

J\1ario, a single taxpayer with two dependent children, has the following items of income and expense during 2018: a. Determine Mario's taxable income for 2018. b. Determine Mario's NOL for 2018....

Q: Charlotte (age 40) is a surviving spouse and provides all

Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children who live with her. She also maintains the household in which her parents live and furnished 6001o of...

Q: Compute the taxable income for 2018 for Aiden on the basis of

Compute the taxable income for 2018 for Aiden on the basis of the following information. Aiden is married but has not seen or heard from his wife since 2016.

Q: Norma, who i5 single and uses the cash method of accounting

Norma, who i5 single and uses the cash method of accounting, lives in a state that imposes an income tax. In April 2018, she files her state income tax return for 2017 and pays an additional $1,000 in...

Q: Compute the taxable incon1e for 2018 in each of the following independent

Compute the taxable incon1e for 2018 in each of the following independent situations: a. Drew and Meg, ages 40 and 41, respectively, are married and file a joint return. In addition to four dependent...

Q: Linda, age 37 who files as a single taxpayer, had

Linda, age 37 who files as a single taxpayer, had AG! of $280,000 for 2018. She incurred the following expenses and losses during the year: Calculate Linda's allowable itemized deductions for the ye...

Q: Wolfgang, who is age 33, records AGI of $125

Wolfgang, who is age 33, records AGI of $125,000. He incurs the following itemized deductions for 2018. a. Calculate Wolfgang's itemized deductions for AMT purposes. b. What is the total amount of h...

Q: Paul and Sonja, who are married, had itemized deductions of

Paul and Sonja, who are married, had itemized deductions of $13,200 and Issue ID $400, respectively, during 2018. Paul suggests that they file separately-he will itemize his deductions from AGI, and s...

Q: Which of the following statements is most correct? a.

Which of the following statements is most correct? a. Tax preference items for the alternative minimum tax are always added back to regular taxable income. b. Itemized deductions that are added back...

Q: Gabriel, age 40, and Emma, age 33. are

Gabriel, age 40, and Emma, age 33. are married with two dependents. They recorded AG! of $250,000 in 2018 that included net investment income of $3,000 and gambling winnings of $2,500. The couple incu...

Q: Jane and Robert Brown are married and have eight children, all

Jane and Robert Brown are married and have eight children, all of whom are eligible to be claimed as the couple's dependents. Robert earns $196,000 working as a senior n1anager in a public accounting...

Q: Frank, age 35, and Joyce, age 34, are

Frank, age 35, and Joyce, age 34, are married and file a joint income tax return for 2018. Their salaries for the year total $84,600 and they have taxable interest income of $3,900. They have no deduc...

Q: Phan Mai is single with two dependent children under age 17.

Phan Mai is single with two dependent children under age 17. Phan estimates her wages for the year will be $42,000, her dependent care expenses will be $6,300, and her itemized deductions will be $14,...

Q: Ralph and Kathy Gump are married with one 20-year-

Ralph and Kathy Gump are married with one 20-year-old dependent child. Ralph earns a total of $98,000 and estimates their itemized deductions to be $28,500 for the year. Kathy is not employed. Use For...

Q: 1. Which of the following is not a change made to

1. Which of the following is not a change made to individual taxation by the Tax Cuts and Jobs Act? a. Repeal of personal exemptions b. General lowering of tax rates c. Repeal of the individual altern...

Q: Jason and Mary are married taxpayers in 2018. They are both

Jason and Mary are married taxpayers in 2018. They are both under age 65 and in good health. For 2018 they have a total of $41,000 in wages and $700 in interest income. Jason and Mary’s deductions for...

Q: Diego, age 28, married Dolores, age 27, in

Diego, age 28, married Dolores, age 27, in 2018. Their salaries for the year amounted to $47,230 and they had interest income of $3,500. Diego and Dolores’ deductions for adjusted gross income amount...

Q: Jim, age 50, and Martha, age 49, are

Jim, age 50, and Martha, age 49, are married with three dependent children. They file a joint return for 2018. Their income from salaries totals $49,500, and they received $10,125 in taxable interest,...

Q: Ulysses and Penelope are married and file separate returns for 2018.

Ulysses and Penelope are married and file separate returns for 2018. Penelope itemizes her deductions on her return. Ulysses’ adjusted gross income was $17,400, his itemized deductions were $2,250. Ne...

Q: Leslie is a single taxpayer who is under age 65 and in

Leslie is a single taxpayer who is under age 65 and in good health. For 2018, she has a salary of $24,000 and itemized deductions of $1,000. Leslie allows her mother to live with her during the winter...

Q: Alicia, age 27, is a single, full-time

Alicia, age 27, is a single, full-time college student. She earns $13,200 from a part time job and has taxable interest income of $1,450. Her itemized deductions are $845. Calculate Alicia’s taxable i...

Q: Jordan Johnson is single and has adjusted gross income of $50

Jordan Johnson is single and has adjusted gross income of $50,000 in the current year. Additional information is as follows: What amount may Jordan claim as itemized deductions on her current-year i...

Q: Paul and Sonja, who are married, had itemized deductions of

Paul and Sonja, who are married, had itemized deductions of $13,200 and $400, respectively during 2018. Paul suggests that they file separately he will itemize his deductions from AGI, and she will cl...

Q: Daniel B. Butler and Freida C. Butler, husband and

Daniel B. Butler and Freida C. Butler, husband and wife, file a joint return. The Butlers live at 625 Oak Street in Corbin, KY 40701. Dan's Social Security number is 111-11-1112, and Freida's is 123-4...

Q: Tim and Sarah Lawrence are married and file a joint return.

Tim and Sarah Lawrence are married and file a joint return. Tim's Social Security number is 123-45-6789, and Sarah's Social Security number is 111-11-1111. They reside at 100 Olive Lane, Covington, LA...

Q: Mason Phillips, age 45, and his wife, Ruth,

Mason Phillips, age 45, and his wife, Ruth, live at 230 Wood Lane, Salt Lake City, UT 84101. Mason's Social Security number is 111-11-1111. Ruth's Social Security number is 123-45-6789. Mason and Ruth...

Q: Kurstie received a $800 state income tax refund this year.

Kurstie received a $800 state income tax refund this year. Kurstie deducted $3,000 of state income taxes paid in the prior year as part of her itemized deductions Which of the following statements reg...

Q: John and Mary Jane Diaz are married, filing jointly. Their

John and Mary Jane Diaz are married, filing jointly. Their address is 204 Shoe Lane, Blacksburg, VA 24061. John is age 35, and Mary Jane is age 30. They are expecting their first child in early 2019....

Q: Janice Morgan, age 24, is single and has no dependents

Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2018, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her b...

Q: Alton Newman, age 67, is married and files a joint

Alton Newman, age 67, is married and files a joint return with his wife, Clair, age 65. A1ton and C1air are both retired, and during 2018, they received Social Security benefits of $10,000. Both Alton...

Q: John Benson, age 40, is single. His Social Security

John Benson, age 40, is single. His Social Security number is 111-11-1111, and he resides at 150 Highway 51, Tangipahoa, LA 70465. John has a 5-year-old child, Kendra, who lives with her mother, Katy....

Q: Tom and Alice Honeycutt, ages 45 and 46, respectively,

Tom and Alice Honeycutt, ages 45 and 46, respectively, live at 101 Glass Road, Delton, MI 49046. Tom is a county employee, and Alice is a self-employed accountant. Tom's Social Security number is 111-...

Q: Beth R. Jordan lives at 2322 Sky view Road, Mesa

Beth R. Jordan lives at 2322 Sky view Road, Mesa, AZ 85201. She is a tax accountant with Mesa Manufacturing Company, 1203 Western Avenue, Mesa, AZ 85201 (employer identification number 11-1111111). Sh...

Q: Dolly is a cash basis taxpayer. In 2018, she filed

Dolly is a cash basis taxpayer. In 2018, she filed her 2017 South Carolina income tax return and received a $2,200 refund. Dolly took the standard deduction on her 2017 Federal income tax return, but...

Q: In connection with 222 (deduction for qualified tuition and related expenses

In connection with 222 (deduction for qualified tuition and related expenses), comment on the relevance of the following: a. The standard deduction is claimed. b. Enro11ment at a college does not requ...

Q: Jayden, a calendar year taxpayer paid $16,000 in

Jayden, a calendar year taxpayer paid $16,000 in Medical expenses and sustained a $20,000 casualty loss in 2018 (the loss occurred in a Federally declared disaster area). He expects $12,000 of the med...

Q: Matt, who is single, always has elected to itemize deductions

Matt, who is single, always has elected to itemize deductions rather than take the standard deduction. In prior years, his itemized deductions always exceeded the standard deduction by a substantial a...

Q: Each year, Tom and Cindy Bates norma11y have itemized deductions of

Each year, Tom and Cindy Bates norma11y have itemized deductions of $20,000, including a $4,000 p1edge payment to their church. Upon the advice of a friend, they do the following: in early January 201...

Q: Sam, age 45, is single. For 2018, he

Sam, age 45, is single. For 2018, he has the following items: a. Determine Sam's taxab1e income for 2018. b. Determine Sam's NOL for 2018.

Q: Xinran, who is married and files a joint return, ow

Xinran, who is married and files a joint return, ow ns a grocery store. In 2018 his gross sales were $276,000, and operating expenses were $320,000. Other items on his 2018 return were as follows: I...

Q: During 2018, Rick and his wife, Sara had the following

During 2018, Rick and his wife, Sara had the following items of income and expense to report: a. Assuming that Rick and Sara file a joint return, what is their taxable income for 2018? b. What is th...

Q: Javiera and Magda are married and file a joint return. They

Javiera and Magda are married and file a joint return. They had the following income and deductions for 2019: a. What is Javiera and Magda's taxable income for 2019? b What is Javiera and Magda's NO...

Q: Soong, single and age 32, had the following items for

Soong, single and age 32, had the following items for the tax year 2018: • Salary of $ 30,000. • Interest income from U.S. government bonds of $2,000. • Dividends from a foreign corporation of $ 500 •...

Q: Norma, who is single and uses the cash method of accounting

Norma, who is single and uses the cash method of accounting, lives in a state that imposes an income tax. In April 2018, she files her state income tax return for 2017 and pays an additional $1,000 in...

Q: Evan is single and has AGI of $277,300 in

Evan is single and has AGI of $277,300 in 2018. His potential itemized deductions before any limitations for the year total $52,300 and consist of the following: After all necessary adjustments are...

Q: For calendar year 2018, Stuart and Pamela Gibson file a joint

For calendar year 2018, Stuart and Pamela Gibson file a joint return reflecting AGI of $350,000. Their itemized deductions are as follows: Calculate the amount of itemized deductions the Gibsons may...

Q: Myrna and Geoffrey filed a joint tax return in 2017. Their

Myrna and Geoffrey filed a joint tax return in 2017. Their AGI was $85,000, and itemized deductions were $13,700, which included $4,000 in state income tax. In 2018, they received a $1,800 refund of t...

Q: A provision of the Code allows a taxpayer a deduction for Federal

A provision of the Code allows a taxpayer a deduction for Federal income tax purposes for some state and local income taxes paid. Does this provision eliminate the effect of multiple taxation of the s...

Q: Assume the same facts as in Problem 35, except that the

Assume the same facts as in Problem 35, except that the business is a "specified services" business (e.g., a consulting firm) owned equally by Elliot and Conrad (an unrelated individual) in a two-memb...

Q: The Wall Street Journal reports that 33% of taxpayers with adjusted

The Wall Street Journal reports that 33% of taxpayers with adjusted gross incomes between $30,000 and $60,000 itemized deductions on their federal income tax return. The mean amount of deductions for...

Q: To the Internal Revenue Service, the reasonableness of total itemized deductions

To the Internal Revenue Service, the reasonableness of total itemized deductions depends on the taxpayer’s adjusted gross income. Large deductions, which include charity and medical...

Q: In exercise 13, data were given on the adjusted gross income

In exercise 13, data were given on the adjusted gross income x and the amount of itemized deductions taken by taxpayers. Data were reported in thousands of dollars. With the estimated regression equat...

Q: For the following problems, assume the taxable year is 2019.

For the following problems, assume the taxable year is 2019. Ms. Noteboom, a single taxpayer, projects that she will incur about $13,500 of expenses qualifying as itemized deductions in both 2019 and...

Q: During 2019, Raul incurred and paid the following expenses:

During 2019, Raul incurred and paid the following expenses: Prescription drugs ……………………………………………………….……… $ 470 Vitamins and over-the-counter cold remedies …………………………… 130 Doctor and dentist visits ……...

Q: When an individual who is single has taxable income of $60

When an individual who is single has taxable income of $60,000, the tax rate on qualified dividends is a. 0%. b. 25%. c. 15%. d. 5%. 26. Graciela, who is single, reported itemized deductions of $12,1...

Q: Each of the following taxpayers received a state income tax refund in

Each of the following taxpayers received a state income tax refund in 2019. In all cases, the taxpayer has a filing status of married filing jointly. What amount of the refund is properly included in...

Q: Hortencia is employed as an accountant for a large firm in San

Hortencia is employed as an accountant for a large firm in San Diego. For relaxation she likes to go to a nearby casino and play in blackjack tournaments. During 2019, she incurred $6,475 in gambling...

Q: Leslie and Jason, who are married, paid the following expenses

Leslie and Jason, who are married, paid the following expenses during 2019: Interest on a car loan ……………………………………………………………………………… $ 100 Interest on lending institution loan ……………………………………………………………………...

Q: Carson had the following itemized deductions in 2019: State income

Carson had the following itemized deductions in 2019: State income taxes………………..………………..………………..$ 1,500 Charitable contributions………………..………………..…………..9,900 Mortgage interest (personal residence) ……………...

Q: Which of the following itemized deductions is not allowed for AMT?

Which of the following itemized deductions is not allowed for AMT? a. Medical expenses. b. Taxes. c. Charitable contributions. d. Interest on loan to purchase principal residence.

Q: Paul reported the following itemized deductions on his 2019 tax return.

Paul reported the following itemized deductions on his 2019 tax return. His AGI for 2019 was $65,000. The mortgage interest is all qualified mortgage interest to purchase his personal residence. For A...

Q: The Wall Street Journal reports that 33% of taxpayers with adjusted

The Wall Street Journal reports that 33% of taxpayers with adjusted gross incomes between $30,000 and $60,000 itemized deductions on their federal income tax return. The mean amount of deductions for...

Q: Charlotte (age 40) is a surviving spouse and provides all

Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children (ages 4, 8, 11, and 14) who live with her. She also maintains the household in which her parents liv...

Q: Each year, Tom and Cindy Bates normally have itemized deductions of

Each year, Tom and Cindy Bates normally have itemized deductions of $22,000 (which includes a $4,000 pledge payment to their church). On the advice of a friend, they do the following: in early January...

Q: Compute the taxable income for 2021 in each of the following independent

Compute the taxable income for 2021 in each of the following independent situations: a. Aaron and Michele, ages 40 and 41, respectively, are married and file a joint return. In addition to four depend...

Q: Paul and Sonja, who are married, had itemized deductions of

Paul and Sonja, who are married, had itemized deductions of $13,200 and $400, respectively, during 2021. Paul suggests that they file separately—he will itemize his deductions from AGI, and she will c...

Q: How many U.S. individuals claim a deduction for casualties

How many U.S. individuals claim a deduction for casualties? Does it vary by size of income (AGI)? How do casualty loss deductions compare to the amounts of other itemized deductions claimed by taxpaye...

Q: Apply the tax benefit rule to determine the amount of the state

Apply the tax benefit rule to determine the amount of the state income tax refund included in gross income in 2021. a. Myrna and Geoffrey filed a joint tax return in 2020. Their AGI was $85,000, and i...

Q: Janice Morgan, age 24, is single and has no dependents

Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2020, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her b...

Q: Martin S. Albert (Social Security number 111-11-

Martin S. Albert (Social Security number 111-11-1111) is 39 years old and is married to Michele R. Albert (Social Security number 123-45-6789). The Alberts live at 512 Ferry Road, Newport News, VA 236...

Q: John and Mary Jane Diaz are married, filing jointly. Their

John and Mary Jane Diaz are married, filing jointly. Their address is 204 Shoe Lane, Blacksburg, VA 24061. John is age 35, and Mary Jane is age 30. They are expecting their first child in early 2022....

Q: Mason Phillips, age 45, and his wife, Alyssa,

Mason Phillips, age 45, and his wife, Alyssa, live at 230 Wood Lane, Salt Lake City, UT 84101. Mason’s Social Security number is 111-11-1111. Alyssa’s Social Security number is 123-45-6789. Mason and...

Q: Noelle’s diamond ring was stolen in November 2017. She originally paid

Noelle’s diamond ring was stolen in November 2017. She originally paid $8,000 for the ring, but it was worth considerably more at the time of the theft. Noelle filed an insurance claim for the stolen...

Q: Dolly is a cash basis taxpayer. In 2021, she filed

Dolly is a cash basis taxpayer. In 2021, she filed her 2020 South Carolina income tax return and received a $2,200 refund. Dolly took the standard deduction on her 2020 Federal income tax return but w...

Q: How does the tax benefit rule apply in the following cases?

How does the tax benefit rule apply in the following cases? a. In 2019, the Orange Furniture Store, an accrual method sole proprietorship, sold furniture on credit for $1,000 to Sammy. The cost of the...

Q: Jaimee and Mike live in Austin, Texas. They married early

Jaimee and Mike live in Austin, Texas. They married early in January 2020. They had saved a significant amount of money for their wedding, but instead decided to elope. The couple used the money they...

Q: Nichole, who is single and uses the cash method of accounting

Nichole, who is single and uses the cash method of accounting, lives in a state that imposes an income tax. In April 2021, she files her state income tax return for 2020 and pays an additional $1,000...

Q: Evan is single and has AGI of $277,300 in

Evan is single and has AGI of $277,300 in 2021. His potential itemized deductions before any limitations for the year total $52,300 and consist of the following: Medical expenses (before the 7.5%-of-A...

Q: Linda, who files as a single taxpayer, had AGI of

Linda, who files as a single taxpayer, had AGI of $280,000 for 2021. She incurred the following expenses and losses during the year: Medical expenses (before the 7.5%-of-AGI limitation) ……………………………….....

Q: Matt, who is single, always has elected to itemize deductions

Matt, who is single, always has elected to itemize deductions rather than take the standard deduction. In prior years, his itemized deductions always exceeded the standard deduction by a substantial a...

Q: Betty is age 34 and has AGI of $50,000

Betty is age 34 and has AGI of $50,000. The following items may qualify as itemized deductions for Betty: Qualified medical expenses (before 7.5% AGI floor) ………………………….$6,000 Real estate tax ………………………...

Q: Betty is age 34 and has AGI of $50,000

Betty is age 34 and has AGI of $50,000 and regular taxable income of $35,000. The following items may qualify as itemized deductions for Betty: Qualified medical expenses (before percentage of AGI flo...

Q: Tim and Sarah Lawrence are married and file a joint return.

Tim and Sarah Lawrence are married and file a joint return. Tim’s Social Security number is 123-45-6789, and Sarah’s Social Security number is 111-11-1111. They reside at 100 Olive Lane, Covington, LA...

Q: Alton Newman, age 67, is married and files a joint

Alton Newman, age 67, is married and files a joint return with his wife, Clair, age 65. Alton and Clair are both retired, and during 2020, they received Social Security benefits of $10,000. Both Alton...

Q: John Benson, age 40, is single. His Social Security

John Benson, age 40, is single. His Social Security number is 111-11-1111, and he resides at 150 Highway 51, Tangipahoa, LA 70465. John has a 7-year-old child, Kendra, who lives with her mother, Katy....

Q: For calendar year 2021, Stuart and Pamela Gibson file a joint

For calendar year 2021, Stuart and Pamela Gibson file a joint return reflecting AGI of $350,000. Their itemized deductions are as follows: Casualty loss in a Federally declared disaster area (not cove...

Q: Wolfgang, who is age 33, records AGI of $125

Wolfgang, who is age 33, records AGI of $125,000. He incurs the following itemized deductions for 2021. Medical expenses [$11,875 2 (7.5% 3 $125,000)] …………………………….$2,500 State income taxes ……………………………...

Q: Jayden, a calendar year taxpayer, paid $16,000

Jayden, a calendar year taxpayer, paid $16,000 in medical expenses and sustained a $20,000 casualty loss in 2021 (the loss occurred in a Federally declared disaster area). He expects $12,000 of the me...

Q: Gabriel, age 40, and Emma, age 33, are

Gabriel, age 40, and Emma, age 33, are married with two dependents. They recorded AGI of $250,000 in 2021 that included net investment income of $3,000 and gambling winnings of $2,500. In itemizing de...

Q: Jane and Robert Brown are married and have eight children, all

Jane and Robert Brown are married and have eight children, all of whom are considered dependents for Federal income tax purposes. Robert earns $196,000 working as senior manager in a public accounting...

Q: Tom and Alice Honeycutt, ages 45 and 46, respectively,

Tom and Alice Honeycutt, ages 45 and 46, respectively, live at 101 Glass Road, Delton, MI 49046. Tom is a county employee, and Alice is a self-employed accountant. Tom’s Social Security number is 111-...

Q: Phan Mai is single with two dependent children under age 17.

Phan Mai is single with two dependent children under age 17. Phan estimates her wages for the year will be $42,000 and her itemized deductions will be $14,000. In the previous year, Phan had a small t...

Q: Ralph and Kathy Gump are married with one 20-year-

Ralph and Kathy Gump are married with one 20-year-old dependent child. Ralph earns a total of $98,000 and estimates their itemized deductions to be $29,500 for the year. Kathy is not employed. Use For...

Q: Diego, age 28, married Dolores, age 27, in

Diego, age 28, married Dolores, age 27, in 2019. Their salaries for the year amounted to $47,230 and they had interest income of $3,500. Diego and Dolores’ deductions for adjusted gross income amounte...

Q: Ulysses and Penelope are married and file separate returns for 2019.

Ulysses and Penelope are married and file separate returns for 2019. Penelope itemizes her deductions on her return. Ulysses’ adjusted gross income was $17,400, his itemized deductions were $2,250. Ne...

Q: Alicia, age 27, is a single, full-time

Alicia, age 27, is a single, full-time college student. She earns $13,200 from a part-time job and has taxable interest income of $1,450. Her itemized deductions are $845. Calculate Alicia’s taxable i...

Q: Jim, age 50, and Martha, age 49, are

Jim, age 50, and Martha, age 49, are married with three dependent children. They file a joint return for 2019. Their income from salaries totals $49,500, and they received $10,125 in taxable interest,...

Q: Frank, age 35, and Joyce, age 34, are

Frank, age 35, and Joyce, age 34, are married and file a joint income tax return for 2019. Their salaries for the year total $84,800 and they have taxable interest income of $3,900. They have no deduc...

Q: 2. Jason and Mary are married taxpayers in 2019. They

2. Jason and Mary are married taxpayers in 2019. They are both under age 65 and in good health. For 2019 they have a total of $41,000 in wages and $700 in interest income. Jason and Mary’s deductions...

Q: Leslie is a single taxpayer who is under age 65 and in

Leslie is a single taxpayer who is under age 65 and in good health. For 2019, she has a salary of $24,000 and itemized deductions of $1,000. Leslie allows her mother to live with her during the winter...

Q: 21. In April 2019, Fred paid $60 of state

21. In April 2019, Fred paid $60 of state income tax that was due when he filed his 2018 income tax return. During 2019, Fred’s employer withheld $1,500 of state income tax from his pay. In April 2020...

Q: 13. Kevin purchased a house 20 years ago for $100

13. Kevin purchased a house 20 years ago for $100,000 and he has always lived in the house. Three years ago, Kevin married Karen, and she has lived in the house since their marriage. If they sell Kevi...

Q: 1. Which of the following recent tax changes is not scheduled

1. Which of the following recent tax changes is not scheduled to expire after 2025? a. Suspension of personal exemptions b. General lowering of individual tax rates c. Restrictions on the deduction of...

Q: 11. Margaret and her sister support their mother and together provide

11. Margaret and her sister support their mother and together provide 85 percent of their mother’s support. If Margaret provides 40 percent of her mother’s support: a. Her sister is the only one who c...

Q: Richard McCarthy (born 2/14/1965; Social Security

Richard McCarthy (born 2/14/1965; Social Security number 100-10-9090) and Christine McCarthy (born 6/1/1967; Social Security number 101-21-3434) have a 19-year-old son (born 10/2/2000 Social Security...

Q: Taxable Income. Nick and Nora are married and file jointly.

Taxable Income. Nick and Nora are married and file jointly. They have an adjusted gross income of $47,400. If they have itemized deductions of $22,500, what is their taxable income?

Q: Change in Taxable Income. Using the information in problem 7,

Change in Taxable Income. Using the information in problem 7, if Nick and Nora’s itemized deductions increase by $4,000, how will their taxable income be affected? Data from Problem 7: Taxable Income...

Q: Grixdale Tax Services prepares taxes for individuals. Grixdale offers a simplified

Grixdale Tax Services prepares taxes for individuals. Grixdale offers a simplified pricing model with two alternatives for taxpayers: Standard Deduction (Standard) or Itemized Deductions (Itemized). P...