1. Ross Martin arrived at the following tax information:

Gross salary, $56,145

Interest earnings, $205`

Dividend income, $65

Standard deduction, $12,000

Itemized deductions, $11,250

Adjustments to income, $1,200

What amount would Ross report as taxable income?

2. If Lola Harper had the following itemized deductions, should she use Schedule A or the standard deduction? The standard deduction for her tax situation is $12,000.

Donations to church and other charities, $6,050

Medical and dental expenses that exceed 10 percent of adjusted gross income, $2,400

State income tax, $4,690

3. What would be the average tax rate for a person who paid taxes of $4,584 on a taxable income of $41,670?

4. Using Federal Tax Rate Schedules. Using the tax rate schedule in Exhibit 4-6, determine the amount of taxes for the following taxable income amounts:

1. Married Filing Jointly: Taxable income $50,000.
2. Married Filing Jointly: Taxable income $70,000.
3. Married Filing Jointly: Taxable income $95,000.

5. Explain the difference between a short-term capital gain and a long-term capital gain.