Chapter 11 HW Solutions

Chapter 11 HW Solutions - 19. Student Loan Interest...

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Student Loan Interest Solution: Her deduction is $1,667.50 $130,000 AGI - $120,000 threshold = $10,000 excess $10,000 excess/$30,000 phase out range = 33.3% phase out $2,500 maximum – ($2,500 x 33.3% phase out) = $1,667.50. 21. Dependency Exemptions Solution: One. Miriam’s taxable income ($4,000) is above the allowable $3,650 limit so she does not pass the gross income test. Mike is a qualifying child so he qualifies as a dependent. 22. Standard Deduction Solution: $15,800. $11,400 basic standard deduction + $4,400 (4 x $1,100) additional for age and blindness. 24. Dependent’s Taxable Income Solution: $500. $2,500 wages + $800 dividend income = $3,300 AGI - $2,800 standard deduction = $500 taxable income. A dependent’s standard deduction is the greater of $950 or earned income ($2,500) plus $300. No personal exemption is allowed. 26. Phaseout of Exemptions Solution: For 2009: a. $12,167. Their exemptions before phaseout are $14,600 ($3,650 x 4). ($310,250 - $250,200)/$2,500 = 24.02 (round up to 25) 25 x 2 = 50% phaseout percentage 50% x $14,600 x 1/3 phaseout reduction = $2,433. $14,600 - $2,433 = $12,167 b. $3,236. His exemption before phaseout is $3,650 for one personal exemption. ($207,000 - $166,800)/$2,500 = 16.08 (round up to 17) 17 x 2 = 34% phaseout percentage 34% x $3,650 x 1/3 phaseout reduction = $414 $3,650 - $414 = $3,236. Note that the phaseout factor was always rounded up to the next whole number because the phaseout applied to each increment of $2,500 “or fraction thereof.” For 2010: a. $14,600 b. $3,650 27. Medical Expense Deduction Solution: $4,250. $14,000 - $3,000 reimbursement – (7.5% x $90,000) floor = $4,250. Note that if this is Daniel’s only itemized deduction, he would be better off simply
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This note was uploaded on 02/26/2012 for the course ACTG 470 taught by Professor Staff during the Spring '10 term at University of Oregon.

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Chapter 11 HW Solutions - 19. Student Loan Interest...

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