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Exam 3: Tax Formula and Tax Determination: an Overview of Property Transactions

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Question 51

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Taylor had the following transactions for 2012: What is Taylor's AGI for 2012?

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$76,000.$85,000 (salary)+ $3,000 (raffle...

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Question 52

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In 2012,Pierre had the following transactions: Pierre's AGI is:

A) $83,000.
B) $94,000.
C) $98,000.
D) $103,000.
E) $114,000.

F) A) and E)
G) C) and D)

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Question 53

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Ethan had the following transactions during 2012: What is Ethan's AGI for 2012?

After her divorce,Hope continues to support her ex-husband's sister,Cindy,who does not live with her.Hope can claim Cindy as a dependent.

Once they reach age 65,many taxpayers will switch from itemizing their deductions from AGI and start claiming the standard deduction.

Deductions for AGI are often referred to as "above-the-line" or "page 1" deductions.Explain.

For dependents who have income,special filing requirements apply.

Regarding the tax formula and its relationship to Form 1040,which,if any,of the following statements is correct?

Albert buys his mother a TV.For purposes of meeting the support test,Albert cannot include the cost of the TV.

Maude's parents live in another state and she cannot claim them as her dependents.If Maude pays their medical expenses,can she derive any tax benefit from doing so? Explain.

When the kiddie tax applies,the child need not file an income tax return because the child's income will be reported on the parents' return.

In order to claim a dependency exemption for other than a qualifying child,a taxpayer must meet the support test.Generally,this is done by furnishing more than 50% of a dependent's support.What exceptions exist,if any,where the support furnished need not be more than 50%?

Tony,age 15,is claimed as a dependent by his grandmother.During 2012,Tony had interest income from Boeing Corporation bonds of $1,000 and earnings from a part-time job of $700.Tony's taxable income is:

Sylvia,age 17,is claimed by her parents as a dependent.During 2012,she had interest income from a bank savings account of $2,000 and income from a part-time job of $4,200.Sylvia's taxable income is:

Kyle and Liza are married and under 65 years of age.During 2012,they furnish more than half of the support of their 19-year old daughter,May,who lives with them.She graduated from high school in May 2011.May earns $15,000 from a part-time job,most of which she sets aside for future college expenses.Kyle and Liza also provide more than half of the support of Kyle's cousin who lives with them.Liza's father,who died on January 3,2012,at age 90,has for many years qualified as their dependent.How many personal and dependency exemptions should Kyle and Liza claim?

Derek,age 46,is a surviving spouse.If he has itemized deductions of $12,100 for 2012,Derek should not claim the standard deduction.

Contrast the tax consequences resulting from the following filing status situations:

Katelyn is divorced and maintains a household in which she and her daughter,Crissa,live.Crissa,age 22,earns $11,000 during 2012 as a model.Katelyn does qualify for head of household filing status.

A taxpayer who itemizes must use Form 1040,and cannot use Form 1040EZ or Form 1040A.

During 2012,Jackson had the following capital gains and losses: