M504 Quiz 9 Solution

M504 Quiz 9 Solution - Name Class Date B d Mgmt 504 Chfl M...

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Unformatted text preview: Name: Class: Date: B d Mgmt 504 - Chfl- Mar 25, 2008 QLLIZ 01 52M 0779’” Short Answer (3) . Describe the rules that apply to individual taxpayers for determining the deductibility of each of the following types of interest. Include in your discussion whether the interest is deducted for or from AGI, and any limitations that apply. 3. Interest associated with trade or business activities b. EWh investment fixgiies 7: Z ”It'd-{4 A W _ . ~ .4 - - W M 3 f C a a a ./ 3-W _ r5: fix... c1. Interest associated with personal purchases and activities , .- «I: W W’ , “ab. bun-4“ fwd-«W Name: -_ M, (2) . Saliaron is 19 years old, a full time student, and a dependent of her parents. She earns $1,500 from her job as a waitress and receives $3,000 of interest on a savings account established by her grandparents. a. What is Sharon's taxable income? 74/ 53"” bfl/S‘I‘fi-E’SS mph-J4: 3? #5; ' '22:; 57') 252:; £27 tar-J 4/64““; ‘J ”LL—‘— r a, 76-9 flxflnr rue-m- ,___.—-———— b. What is Sharon‘s tax liability on the taxable income (assume that her parent's taxable income is $200,000)? /#2¢€» fifi; [/Eéxjg ; fag} f/WALS 12,6927] fine-y 4?“ [up 3 7913 pl)!!!" f—" W f ’ ”#43 fl Name: _ 1 @ Q In each of the following independent cases determine the total number of erso de endency exemptions Tom may claim. Assume that Tom is single, 32 years old and any dependency test not mentioned Has been met. a. Tom provides 80% support of his nephew (age 17), who lives with him. During the year, the nephew has gross income of $4,000 and is a full time student. g: {NF/‘29 My: >r3‘fléfa) b. Tom and his two brothers each provide 15% of the support of their mother. The mother derives the remainder of her support from Social Security benefits of $9,300. 1 7;)“; pfiJJ—V "'" c. Tom provides 60% support of his mother, age 69. His mother received dividend income of $3,300 and Social Security benefits of $8,500. *71m / M; 774—0.. ,__.——- Name: V (7:) ' Manny pays $2,000 of interest on $20,000 of debt incurred for the purchase of portfolio assets during the current year. Manny used the debt to purchase municipal bonds and corporate bonds. Manny receives $800 of interest on the municipal bonds and $800 of interest on the corporate bonds. What is his allowable deduction on the $2,000 of interest? Explain your answer and show all calculations. .r 7‘399‘1— flvflf/‘M /~raae% 37,59) Ar» LFSS ,H7m awn/n.) C—fl'figfi" 7:: km“ 13 . J13 5—}:7; x 2):.” c. 3afi-f‘3-‘9 ’ A ...
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