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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