Questions and Answers of Federal Taxation 2019

Gary earned $97,000 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
Matt and Sandy reside in a community property state. Matt left home in April 2018 because of disputes with his wife, Sandy. Subsequently, Matt earned $15,000. Before leaving home in April, Matt
Ken and Lynn paid $5,000 to purchase Series EE bonds in the name of their 11-year-old son. The son has no other income, and they are in the 24% tax bracket. The taxable interest th is year \Viii be
Bart and Kesha, who are in the 37% tax bracket, are interested in reducing their taxes. They are currently considering several alternatives. For each, indicate how much tax, if any, they would
Stan rented an office building to Clay for $3,000 per month. On December 29, 2017, Stan received a deposit of $4,000 in addition to the first and last months' rent. Occupancy began on January 2,
Series EE Bond Interest. In 2014, Harry and Mary purchased Series EE bonds, and in 2018 redeemed the bonds, receiving $500 of interest and $1,500 of principal. Their income from ocher sources totaled
What recent change has been made to the tax treatment of alimony?
What recent change was made to the tax treatment of dividends received by U. S. corporations from foreign subsidiaries?
Andrea, who is in the 37% tax bracket, is interested in reducing her taxes. She is considering several alternatives. For each alternative listed below, indicate how much tax, if any, she would save?
Jack is starting a business that he expects to produce $150,000 of income this year before compensating Jack for his services. He has $1,000 of other income and itemized deductions totaling $14,000.
Virginia is a cash-basis, calendar-year taxpayer. Her salary is $90,000, and she is single. She plans to purchase a residence in 2019. She anticipates her property taxes and interest will total
Bob and Anna are in the 37% 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
In 2018, Lana, a single taxpayer with AGI of $204,400, claims three dependent children, all under age 17. What is the amount of her child credit?
Mike and Linda are a married couple who file jointly. They have three dependent children who are full-time students in 2018. Mike and Linda provided $8,000 of support for each child. Information for
Jan, a single taxpayer, has adjusted gross income of $250,000, medical expenses of $10,000, home mortgage interest of $3,000, and property taxes of $2,000. Should she itemize or claim the standard
Jim and Pat are married and file jointly. In 2018, Jim earned a salary of $92,000. Pat is self-employed. Her gross business income was $98,000 and her business expenses totaled $48,000. Each
For the following independent situations, determine the filing status for the years in question.a. Wayne and Celia had been married for 24 years before Wayne died in an accident in 2016. Celia and
Which of the following taxpayers must file a 2018 return?a. Amy, age 19 and single, has $8,050 of wages, $800 of interest, and $350 of self- employment income.b. Betty, age 67 and single, has a
Bill and Mary plan co marry in December 2018. Bill's salary is $105,000 and he owns his residence. His itemized deductions total $19,000. Mary's salary is $86,000. Her itemized deductions total only
Carl has $60,000 of salary and $11,000 of itemized deductions.Carol has $90,000 of salary and $16,200 of itemized deductions. They are married and under age 65.a. Compute their taxable incomes if
In April 2018, Dan is audited by the IRS for the year 2016. During the course of the audit, the agent discovers that Dan's deductions for business travel and entertainment are unsubstantiated and a
In 2017, Paul, ,who is single, has a comfortable salary from his job as well as income from his investment portfolio. How,ever, he is habitually lace in filing his federal income tax return. He did
a. Keith Thomas and Thomas Brooks began a new consulting business on January 1, 20 18. They organized the business as a C corporation, KT, Inc. During 2018, the corporation was successful and
Based on the amounts of taxable income belo,v, compute the federal income tax payable in 2018 on each amount assuming the taxpayers are married filing a joint return. Also, for each amount of taxable
The PDQ Partnership earned ordinary income of $150,000 in 2018. The partnership has three equal partners, Pete, Donald, and Quint. Quint, ,who is single, uses the standard deduction, and has ocher
The Bruin Corporation, a C corporation, is owned 100% by John Bean and had taxable income in 2018 of $500,000. John is also an employee of the corporation. In December 2018, the corporation has
Carlos inherits 100 shares of Allied Corporation stock from his father. The stock cost his father $8,000 and had a $25,000 FMV on the date of his father's death in 2018. The alternate valuation date

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