24211_ch04_final_p001-012

B 4 8 chapter 4 personal and dependency exemptions

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Unformatted text preview: f $11,600 in 2011. R qualifies as a surviving spouse since he is unmarried and provided a home for a dependent child within the two taxable years after the year of her husband's death. (See p. 4-16.) Head of household and standard deduction in 2011 of $8,500. To qualify as a head of household, the taxpayer generally needs to provide over half the cost of a household that is the home of a dependent relative for more than one-half of the year. However, a child of the taxpayer need not be a dependent. In this case, J qualifies even though his spouse claims the dependency exemption for his child. An unmarried child or stepchild need not be a dependent. (See Exhibit 4-3 and pp. 4-16 through 4-18.) 4-40 Yes, Y qualifies for head-of-household status. Even if Y relinquishes the exemption for her son, she may qualify for head of household status. b. No, C does not qualify for head of household filing status. C would qualify for head of household except that he cannot claim an exemption because his mother does not meet the gross income test. If the interest was tax-exempt municipal bond interest, the mother's gross income would be zero and C would be a head of household. c. Yes, grandpa G qualifies for head-of-household status. The qualifying individual need not be claimed as a dependent if he or she is a child, grandchild, or stepchild. G must have lived with J for more than one-half of the year. d. No, B does not qualify for head-of-household status. The home in which the qualifying individual, B's 26-year-old daughter, lives for more than one-half of the year must be the taxpayer's home (unless the qualifying individual is the taxpayer's parent). e. Yes, M qualifies for head of household status. Since E is over 24 years of age she is not a qualifying child. However, she should meet the other tests for a dependent familial relative. In this regard, an unmarried child of the taxpayer need not be a dependent. However, the individual must live in the home of the taxpayer. It would appear that E meets this test since school is a temporary absence. f. No. F will file a final joint return this year and then file as a surviving spouse the next two years. a. (See Exhibit 4-3 and pp. 4-16 through 4-18.) 4-41 K's taxable income for 2011 is determined as follows: Adjusted gross income ($2,800 $1,450) Less: Standard deduction ($5,800, but limited to earned income $2,800 $300) Personal exemption (none allowed since K is claimed as a dependent) Taxable income (See Example 26 and pp. 4-26 through 4-27.) 4-42 B's taxable income for 2010 (since TaxCut version is 2010) is determined as follows: Adjusted gross income Less: Standard deduction ($5,800, but limited to earned income $3,000 $300) Personal exemption (none allowed since B is claimed as a dependent) Taxable income (See Example 36 and pp. 4-26 through 4-27.) $ 3,000 $3,300 ,,,0000 (3,300) $,00 00 $ 4,250 $3,100 ,000 (3,100) $ 1,150 Solutions to Problem Materials 4-9 4-43 S's taxable income for 2011 is determined as follows: Adjusted gross income ($56,015 $560) Less: Standard deduction Personal exemption Equals: Taxable income Tax for a single taxpayer on $47,075 for 2010 from the tax tables (See Example 22, Exhibit 4-5, pp. 4-22 through 4-24, and Appendix A.) $56,575 $5,800 3,700 (9,500) $47,075 $ 7,950 4-44 The 2011 taxable income and tax liability for W and T are computed as follows: Adjusted gross income Less: Itemized deductions Personal exemptions ($3,700 in 2011 3) Taxable income Tax on first $69,000 Tax on excess ($118,150 $69,000 $49,150) 25% Total tax at regular rates (See Exhibit 4-6 and pp. 4-25 and 4-26.) $141,950 $12,700 11,100 (23,800) $118,150 $ 9,500 12,288 $ 21,788 4-45 In each case, the taxpayer is claimed as a dependent....
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This note was uploaded on 02/05/2012 for the course ACCT 110 taught by Professor Smith during the Spring '11 term at Adrian College.

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