Question
Demarco and Janine Jackson have been married for 20 years and have four children (no children under age 6 at year-end) who qualify as their
Demarco and Janine Jackson have been married for 20 years and have four children (no children under age 6 at year-end) who qualify as their dependents (Damarcus, Jasmine, Michael, and Candice). The couple received salary income of $102,300 and qualified business income of $10,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $246,000 and they sold it for $365,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $18,800 of itemized deductions (no charitable contributions), and they had $1,000 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice was 18 years of age at year end, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the 2021 tax rate schedules.)
rev: 09_09_2021_QC_CS-275920
Comprehensive Problem 4-56 Part-a (Algo)
a. What is the Jacksons taxable income, and what is their tax liability or (refund)? (Do not round intermediate calculations.)
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