11. Choose the statement that applies to Andy Hoffman, a 12-year-old child, who earned $2,200 mowing grass during the summer. Andy also had interest income of $350.

a. Andy's parents may include the $350 of interest income on their tax return.

b. The $350 of unearned income is taxed at his parents' tax rate.

c. Andy must file his own return.

d. Form 8615 is used to compute Andy's income tax.

e. All the above.

12. A taxpayer reported the following items for the year:

	Salary	$50,000
	Loss on sale of XYZ stock	(4,000)
	Gain on sale of ABC stock	6,000
	Gambling winnings	5,000
	Gambling losses	3,000
	Lottery prize	2,000

What is the taxpayer's adjusted gross income on 1040A line 21?

a. $56,000

b. $58,000

c. $60,000

d. $63,000

e. None of the above, it is _________

13. An employee receives $100 in tips during March. She reports the tips to her employer. Which of the following statements is correct regarding tips?

a. The employer adds the $100 to the employee's wages and withholds income, social security, and Medicare taxes on the amount.

b. The employer reports the $100 as allocated tips on the employee's W-2.

c. The employer adds the tips to the employee's wages and withholds income taxes, but not social security or Medicare taxes, on the amount.

d. The employer adds the tips to the employee's wages and withholds social security and Medicare taxes, but not income taxes, on the amount.

e. None of the above. It is $_______

14. Rhonda Patton is single and receives the following income during the year: $30,000 taxable pension, $6,000 in social security payments, and $1,000 of interest on State of Iowa bonds. What is Patton's adjusted gross income based on the above information? Remember you have to add of the social security income and the tax-exempt interest since all the income is over $25,000.

a. $36,000

b. $34,500

c. $33,000

d. $30,000

e. None of the above It is ___________

15. Ann Bliss, age 24, is single and has adjusted gross income of $32,000. She has $3,900 of itemized deductions. What is her taxable income?

a. $19,700

b. $26,200

c. $28,000

d. $24,600

e. None of the above, it is $________