Tax Problems

Tax Problems

Chapter 3
31.
Tom and Linda are married taxpayers who file a joint return. They have itemized deductions of $11,950 and four exemptions. Assuming an adjusted gross income of $40,000, what is their taxable income for 2011?
Problem 31 | |
Adjusted Gross Income | $40,000.00 |
Adjusted Gross Income minus itemized deduction | -$11,950.00 |
Exemption 1 | -3700 |
Exemption 2 | -3700 |
Exemption 3 | -3700 |
Exemption 4 | -3700 |
2011 taxable Income | $13,250.00 |

32.
Compute Marie's taxable income for 2011, assuming she is single and claims two dependent children. Her adjusted gross income is $70,000, and she has itemized deductions of $9,000.

Adjusted Gross Income | $70,000.00 |
Adjusted Gross Income instead of standard deduction of $8,500 as head of household |                                                 -$9,000.00 |
Exemption 1 | -$3,700.00 |
Exemption 2 | -$3,700.00 |
Exemption 3 | -$3,700.00 |
2011 taxable Income | $49,900.00 |

36.
Compute Stanley's taxable income for 2011, assuming he has $1,000 in wages from working in a grocery store and $2,000 in interest income from some bonds he owns. Stanley, age 16, is claimed as a dependent on his parents' return.

Gross Income | 1000+2000= |   $   3,000.00 |
Standard Deduction | 1000+300 |   $ (1,300.00) |
Taxable Income |   |   $   1,700.00 |

Chapter 13

55.
Mr. Z, a nondealer, sold assets on an installment plan. Determine Mr. Z's gross income for 2011. Relevant data include:

Year | Installment Sales | Gross Profit | 2011 Collections | GP% | Mr. Z's gross income for 2011 |
2009 | $200,000.00 | $50,000.00 | $25,000.00 | 25.00% | $           6,250.00 |
2010 | $300,000.00 | $81,000.00 | $80,000.00 | 27.00% |   $         21,600.00 |
2011 | $400,000.00 | $96,000.00 | $125,000.00 | 24.00% |   $         30,000.00 |
| | | | |   $   57,850.00 |

69.
Comprehensive Problem. Bill is a cash-basis, calendar-year taxpayer. Which of the following December...

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