f. Interest received by the taxpayer on an investment in school bonds issued by IBM.
h. Tips received by Matt, a bartender from patrons. (Matt is paid a regular salary by the cocktail lounge that employs him). This would be an inclusion, tips and gratuities.i. Sherri sells her Super Bowl tickets for three times what she paid for them.
j. Jefferson receives a new BMW from his grandmother when he passes the CPA exam.
7. In late 2013, the Polks came to you for tax advice. They are considering selling some stock investments for a loss and making a contribution to a traditional IRA. In reviewing their situation, you note that they have a large medical expenses and a casualty loss, with neither being covered by insurance. What advice would you give to the Polks?
11. Sam and Abby are dependents of their parents, and each earns a gross income of $2,100 for the year. Sam’s standard deduction for the year is $1,000, while Abby’s is $2,450. As their income is the same, what causes the difference in the amount of the standard deduction?
12. Kirby, age 18, lives with her parents in a household maintained by them. As an actress, she earns $600,000 during the year, which, after taxes, is placed in a trust for her. Can Kirby be claimed as a dependent by her parents? Explain.
17. Mark and Lisa were divorced in 2012. In 2013, Lisa has custody of their children but Mark provides nearly all of their support. Who is entitled to claim the children as dependents?