69. Taxpayers who are blind get the benefit of:
70. Electronically filed tax returns:
71. Depending on the amounts of income and other tax information, individuals may report their income on:
72. If an individual wishes to amend his individual tax return, he will make the amendment using what form?
73. An individual is a head of household. What is her standard deduction?
74. In which of the following situations is the taxpayer not required to file an income tax return?
75. Robert is a single taxpayer who has AGI of $145,000 in 2011; his taxable income is $122,000. What is his
federal tax liability for 2011?
76. Which of the following is not a test that must be met for a child to be considered a dependent?
77. Your standard deduction will be $5,800 in 2011 if you are:
78. Bob owns a rental property that he bought several years ago for $260,000. He has taken depreciation on the
house of $37,000 since buying it. He sells it in 2011 for $290,000. His selling expenses were $12,000 for the
year. What was Bob’s realized gain on the sale?
79. Barry (age 45) is a single taxpayer. In 2011, he has gross income of $15,000 and itemized deductions of
$6,500. If Barry claims one exemption on his 2011 income tax return, calculate the following amounts:
a.
His personal exemption amount
b.
Barry’s taxable income
80. Mary (age 33) is a single taxpayer with adjusted gross income for 2011 of $21,040. Mary maintains a home
for two dependent children and has itemized deductions of $3,000. Calculate the following amounts for Mary’s
2011 income tax return:
a.
The number of exemptions claimed
b.
Mary’s standard or itemized deduction amount
c.
Mary’s taxable income
81. Roger (age 39) and Lucy (age 37) are married taxpayers who file a joint income tax return for 2011. They
have gross income of $25,400. Their deductions for adjusted gross income are $550 and they have itemized
deductions of $5,300. If Roger and Lucy claim two personal exemptions and no dependency exemptions for
2011, calculate the following amounts:
a.
Their adjusted gross income
b.
The amount of their standard deduction or itemized deductions
c.
Their taxable income
a.
c.
82. Theodore (age 74) and Maureen (age 59) are married taxpayers with two dependents. Their adjusted gross
income for the 2011 tax year is $43,000, and they have itemized deductions of $7,750. Determine the following
for Theodore and Maureen’s 2011 income tax return:
a.
The number of exemptions
b.
The amount of their standard deduction or itemized deductions
c.
Their taxable income
a.
b.
c.
a.
b.
c.
83. George (age 67) and Linda (age 60) are married taxpayers with two dependent children. Their adjusted
gross income for the 2011 tax year is $138,000. They have itemized deductions of $24,000. Determine the
following for their joint tax return for 2011:
a.
The number of exemptions
b.
Exemption deduction amount
c.
The amount of their standard deduction or itemized deductions
d.
Taxable income
84. For each of the following situations, indicate whether the taxpayer(s) is(are) required to file a tax return for
2011. Explain your answer.
a.
Debra (age 68) and Jerry (age 70) are married and file a joint return. They received $22,000 in interest income from a savings account.
b.
Margie is a single taxpayer with wages in 2011 of $8,400 and interest income of $200.
c.
Janie (age 30) and Scott (age 28) are married and file a joint tax return. They had $17,000 in earnings from wages.
d.
Kim, age 20, is a single college student who is claimed as a dependent by her parents. She earned $2,000 from a part-time job and has
$450 in interest income.
e.
Stefanie, a 25-year-old single taxpayer, has wages of $1,500, from which $80 of federal income tax was withheld.
b.
No. Income of $8,600 is less than the sum of the $3,700 personal exemption plus the $5,800 standard deduction.
c.
No. The taxable income of $17,000 is less than the sum of the $7,400 personal exemptions plus the $11,600 standard deduction.
d.
Yes. Gross income is more than the larger of $950 or $2,300 (earned income of $2,000 plus $300).
e.
No. Stefanie is not required to file a tax return, but she must file if she wishes to receive a refund of the income tax withheld.
85. Monica is a maid in a San Francisco hotel. Monica received $500 in unreported tips during 2011 and owes
Social Security taxes on these tips. Her total income for the year, including tips, is $4,500. Is Monica required to
file an income tax return for 2011?
Why?
a.
b.
c.
d.
86. Determine from the tax table or the tax rate schedule, whichever is appropriate, the amount of the income
tax for each of the following taxpayers for 2011.
Taxpayer(s)
Filing Status
Taxable Income
Income Tax
Macintosh
Single
$35,680
Hindmarsh
MFS
$62,100
Kinney
MFJ
$142,000
Rosenthal
H of H
$91,350
Wilk
Single
$21,130
87. Betty (age 39) and Steve (age 50) are married with two dependent children. They file a joint return for 2011.
Their income from salaries totals $155,000; they receive $1,000 in taxable interest and $2,000 in royalties.
Their deductions for adjusted gross income amount to $3,200; they have itemized deductions totaling $40,000.
Calculate the following amounts:
a.
Gross income
b.
Adjusted gross income
c.
Itemized deduction or standard deduction amount
d.
Deduction for exemptions
e.
Taxable income
f.
Regular income tax liability from rate schedules
a.
b.
c.
d.
e.
88. Steven, age 35, is a single commodities broker. His salary for 2011 is $110,000 and he has taxable interest
income of $40,000. He has no deductions for adjusted gross income. His itemized deductions are $30,000.
Steven does not have any dependents.
a.
What is the amount of his adjusted gross income?
89. In 2011, Len has a salary of $40,000 from his job. He also has interest income of $300. Len is single and has
no dependents. During the year, Len sold stock held as an investment for a $10,000 loss. Calculate the
following amounts for Len.
a.
Adjusted gross income
b.
Standard deduction
c.
Exemption
d.
Taxable income
e.
Tax liability
f.
Explain the tax treatment of the loss from the stock sale.
a.
b.
c.
d.
e.
90. Nathan is 24 years old and works as an accountant in a salmon cannery in Alaska. His total wages for 2011
were $32,000. Federal income tax of $4,500 was withheld from his wages. His only other income was $210 of
interest and he had no deductible expenses.
Calculate the income tax due with, or refund receivable from, Nathan’s 2011 individual income tax return. Use
the tax formula for individuals and show your work.
Gross income
Deductions for adjusted gross income
Adjusted gross income
Standard deduction
Personal exemption
Taxable income
Gross tax liability (from tax table)
Tax withheld
Refund due
a.
d.
e.
91. Kenzie is a research scientist in Tallahassee, Florida. Her husband Gary stays home to take care of their two
young children. Kenzie’s total wages for 2011 were $60,000 from which $6,500 of federal income tax was
withheld.
Calculate the income tax due with, or refund receivable from, Kenzie and Gary’s 2011 individual income tax
return. Use the tax formula for individuals and show your work.
92. Mike purchased stock in MDH corporation 5 years ago for $15,250. This year he sold it for $12,800 and
then paid a $150 sales commission to his broker.
a. What is Mike’s amount realized?
b. What is Mike’s adjusted basis?
c. What is Mike’s realized gain or loss?
d. What is Mike’s recognized gain or loss?
e. How much of the gain or loss can Mike report in his tax return?
93. Fran bought stock in the FCM corporation 4 years ago at a price of $18,000. She sold it this year for
$22,500 and paid her broker $225 from the proceeds of the sale.
a. What is Fran’s amount realized?
b. What is Fran’s adjusted basis?
c. What is Fran’s realized gain or loss?
d. What is Fran’s recognized gain or loss?
e. How much of the gain or loss should be included in her tax return?
94. Calculate the amount of the standard deduction the taxpayers should claim on their 2011 income tax returns.
a. Kelly and Glenn are married with one dependent child. They file a joint return, are in good health, and both of them are under 65 years of
age. They also support her aging father.
b. Fran is 24 years old, in good health, and single.
c. George and Georgina are married and file a joint return. George is 64 years old and Georgina is 63.
d. Norm is 62, single and blind.
e. Kimberly qualifies for head of household filing status, is 42 years old, and is in good health.
f. Lizzie is 11 years old and her only income is $3,200 of interest on a savings account. She is claimed as a dependent on her parents’ tax
return.
95. How should a taxpayer decide whether to take the standard deduction or claim itemized deductions?
96. What is the formula for computing taxable income, as summarized in the text?
97. Norman and Linda are married taxpayers with taxable income of $125,000.
a. When you calculate their tax liability are you required to use the tax tables or the tax rate schedules, or does it
matter?
b. What is their tax liability?
98. Melissa is a 35-year-old single taxpayer with adjusted gross income of $49,000. She uses the standard
deduction and has no dependents.
a. Calculate Melissa’s taxable income. Please show your work.
b. When you calculate Melissa’s tax liability, are you required to use the tax tables or the tax rate schedules, or
does it matter?
c. What is Melissa’s tax liability?
99. Curt and Linda were married on December 31, 2011. What are their options for filing status for their 2011
taxes?
100. Jeri is single and supports her 45-year-old son who has income of $350 from working in a pumpkin patch
during October and lives in his own apartment.
a. Can she claim him as a dependent?
b. Can she claim head of household filing status? Why or why not?
101. Madeline is single and supports her 85-year-old parents who live in a senior home paid for by Madeline
and have no income. What is Madeline’s filing status and why?
102. List each alternative filing status available to unmarried individual taxpayers and the circumstances under
which the alternatives can be used.
103. If Jessica, a 17-year-old guitarist in a successful band, earns $100,000 a year and is completely self-
supporting although she lives with her parents, can her parents claim her as a dependent? Why or why not?
104. Karl’s father, Vronsky, who is a 60-year-old Russian citizen, lived in Russia for the full year. Karl
supported Vronsky while he looked for work. Vronsky had no income. Can Karl claim Vronsky as a
dependent?
105. Hansel and Gretel are married taxpayers who file a joint income tax return for 2011. They have no
dependents. On their 2011 income tax return, they have adjusted gross income of $62,000 and total itemized
deductions of $4,000. What is their taxable income?
106. Rod (age 50) and Ann (age 49) are married taxpayers who file a joint return for 2011. They have gross
income of $150,000. Their deductions for adjusted gross income are $5,000 and they have itemized deductions
of $12,000, consisting of $7,000 in state income taxes and $5,000 in mortgage interest expense. If they claim
two personal exemptions and no dependency exemptions for 2011, calculate the following amounts:
a. Their adjusted gross income
b. The amount of their standard deduction or itemized deductions
c. Their taxable income
107. Distinguish between reporting entities and taxable entities and give examples of each.
108. What is the difference between the standard deduction and itemized deductions?