1)Based on the amounts of taxable income below, determine the federal income tax due forthe 2019 tax year on each amount assuming the taxpayers are married filing a joint return.Also, for each amount of taxable income, compute the average tax rate and the marginaltax rate. For your calculations, use the 2019 Tax Rate Schedule for Married TaxpayersFiling Joint Returns and Surviving Spouses, which can be found at IRS Rev. Proc. 2018-57 at p.8

(a)$ 55,000

(b)$120,000

(c)$375,000

(d)$600,000

2)For each of the following, indicate whether the amount is taxable:

(a)Katrina won $3000 in the state lottery.

(b)Robert won a $500 prize for his entry in a poetry contest.

(c)Lizbeth was awarded $2,000 when she was selected "Teacher of the Year" by herlocal school district.

3)Geraldo rented an office building to Brian for $3,000 per month. On 12/29/18, Geraldoreceived a deposit of $4,000 in addition to the first and last months' rent. Brian commencedoccupancy of the building on 1/02/19. On 7/15/19, Brian closed his business and filed forbankruptcy. Geraldo collected rent for February, March, and April on the first day of eachmonth. He received the May rent on 5/10/19, but collected no payments thereafter. Geraldowithheld $800 from Brian's deposit because of damage to the property and $1,500 for unpaidrent. He refunded the balance of the deposit to Brian. What amount of the above paymentsshould Geraldo have reported as gross rental income in 2018 and 2019?

4)If a single taxpayer has taxable income of $120,000 in 2019, how much will he save in taxes ifhis CPA shows him that he qualifies for an additional deduction of $4,000?

5)A single taxpayer in the 22% tax bracket has the opportunity to earn additional taxable incomeof $10,000 in 2019 without putting him into a higher tax bracket. How much of the additionalincome (after taxes) will the taxpayer get to keep?

6)If a taxpayer in the 32% tax bracket has the opportunity to invest in a taxable corporate bondthat pays 4.8% interest or to invest in a tax-exempt municipal bond that pays 3% interest(assuming that all other elements of the two bonds, e.g., risk, are equal), which investment wouldgenerate the greater after-tax yield?

7) Jake and Janice are a married couple with two dependent children. In 2019, their salaries totaled $130,000, and they suffered a capital loss of $8,000. They also received $1,000 of tax-exempt interest. They paid home mortgage interest of $10,000, state income taxes of $4,000, and medical expenses of $3,000. They also contributed $5,000 to charity. On their 2019 Married Filing Joint tax return what is their (a) adjusted gross income; (b) their total itemized deductions; (c) the amount of their exemptions; and (d) their taxable income.

8) Jerry and Jenny are married, and they will file a 2019 Married Filing Joint tax return. They provided financial assistance to several persons during 2019. For the situations below, determine whether the individuals qualify as dependents of Jerry and Jenny in 2019. Assume in each case that dependency tests not mentioned have been satisfied.

(a) Brian, age 24, is Jerry and Jenny's son. Brian is a full-time student, and he lives in an apartment near the college. Jerry and Jenny provide over 50% of Brian's support. Brian worked as a stock clerk in a super market and earned $4,500.

(b) Same facts as above, except that Brian is a part-time student.

(c) Sheila, age 22, is Jerry and Jenny's daughter. She's a full-time student and lives in a college dormitory. Jerry and Jenny provide over 50% of Sheila's support. Sheila works part-time as an accounting clerk, and she earned $5,000.

(d) Same facts as in (c), except that Sheila is a part-time student.

(e) Grandma, age 82, is Jenny's grandmother, and she lives with Jerry and Jenny. In 2019, Grandma's only income was her Social Security benefits of $4,800 and interest on U.S. bonds of $4,500. Grandma uses her income to pay 45% of her total support, and Jerry and Jenny provide the rest of Grandma's support.

9) John and Joan had been married for 20 years before John died in October 2016. Joan and her son Marley, age 21, continued to live at home in years 2016 - 2019. Marley worked part-time (earning $5,000 in each of the four years). He also attended college on a part-time basis. Joan provided more than 50% of Marley's support in each year. What is Joan's filing status for 2016, 2017, 2018, and 2019? Would Joan's filing status change if Marley attended school full-time rather than part-time? If so, how?

10) According to the AICPA's Statements on Standards for Tax Services, what belief must a CPA have before taking a pro-taxpayer position on a tax return? For assistance in answering this question, please see:

http://www.aicpa.org/InterestAreas/Tax/Resources/StandardsEthics/StatementsonStandardsforTaxServices/DownloadableDocuments/SSTS,%20Effective%20January%201,%202010.pdf