Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

23. Which of the following is not true of the dependency tests for the relative (non-child) dependency tests? a. Generally, a dependents gross income may

23. Which of the following is not true of the dependency tests for the relative (non-child) dependency tests?

a. Generally, a dependents gross income may not exceed the 2017 exemption amount adjusted for inflation ($4,300).

b. Gross income includes scholarships.

c. A child of the taxpayer, under age 24, who is a fulltime student at any time during five calendar months of the tax year is exempted from the gross income test.

d. A child of the taxpayer under age 19 is exempted from the gross income test.

e. The taxpayer must provide more than 50% of total support.

____ 24. Mr. Smith, who is single and has adjusted gross income of $110,000 and a marginal ordinary income tax rate of 24%, had the following transactions in 2021:

Transaction Sales Price Adjusted Basis Holding Period

Sale of 500 shares of ABC $6,000 $3,500 13 months

Sale of personal furniture $3,000 $2,500 36 months

Sale of 10 shares IBM $4,000 $5,500 8 months

Sale of personal auto $9,000 $11,000 15 months

Sale of Mass. bonds $5,000 $6,000 18 months

Sale of Fidelity Fund $8,000 $6,000 9 months

The stock sales are not eligible for gain exclusion under 1202. Mr. Smith's net capital gain or loss on these transactions is (see capital gain brackets on last page):

a. $1500 LTCG taxed at 15% and $500 STCG taxed at 24%

b. $1,500 LTCG taxed at 15%; $2,500 LTCL that is 100% deductible and $2,000 STCG taxed at 24%.

c. $2,000 LTCG taxed at 15% and $500 STCG taxed at 24%

d. $3,000 LTCG taxed at 24% and $500 STCG taxed at 15%.

e. $2,500 LTCG taxed at 0%.

____ 25. Which of the following generally has the least favorable tax rates and brackets?

a. Head of household

b. Married, filing jointly

c. Married, filing separately

d. Single

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Financial Accounting

Authors: Theodore Christensen, David Cottrell, Cassy Budd

13th Edition

1260772136, 9781260772135

More Books

Students also viewed these Accounting questions