68. [LO 3]. Alice is self employed in 2013. Her net business profit on her Schedule C for the year is $140,000.
What is her self-employment tax liability for 2013?
A taxpayers tax base for computing a self-employed taxpayers self-employment tax (i.e., net
[LO 2] Wally is employed as an executive with Pay More Incorporated. To entice Wally to
work for Pay More, the corporation loaned him $20,000 at the beginning of the year at a
simple interest rate of 1 percent. Wally would have paid interest of $2
Real Property Depreciation Example from PowerPoint Presentation
On July 12, Scrap-Happy purchases and places in service a warehouse and the land it resides on for
$170,000 ($120,000 is allocated to the building and $50,000 to the land). What is the amount
52. [LO 1] Lacy is a single taxpayer. In 2013, her taxable income is $38,000. What is her tax
liability in each of the following alternative situations?
a. All of her income is salary from her employer.
Lacys total tax is $5,428.75.
Tax Benefit Rule Examples from PowerPoint Presentation
1. Last year (2014 tax return) Peter who is a single taxpayer reported $5,500 in itemized
deductions including $2,900 of state income taxes paid in 2014 (the 2014 standard
deduction was $6,200). In Ma
[LO 2] Larry purchased an annuity from an insurance company that promises to pay him
$1,500 per month for the rest of his life. Larry paid $170,820 for the annuity. Larry is in
good health, and he is 72 years old. Larry received the first annuity paym
44. [LO 2] Matt and Meg Comer are married. They do not have any children. Matt
works as a history professor at a local university and earns a salary of $64,000.
Meg works part-time at the same university. She earns $21,000 a year. The
couple does not item
SOLUTIONS FOR EXAM 1 REVIEW QUESTIONS
Gift at retirement
Disability insurance proceeds
Net short-term capital gain
Sale of karaoke machine
Inheritance and life
53. [LO 1]. = is a single taxpayer. In 2015, his taxable income is $425,000. What is his
tax liability (including the net investment income tax) in each of the following
a. All of his income is salary from his employer.
[LO 3] Cecil cashed in a Series EE savings bond with a redemption value of $14,000 and an
original cost of $9,800. For each of the following independent scenarios, calculate the amount of
interest Cecil will include in his gross income assuming he fil
cfw_Tax Forms [LO 1, LO 2, LO 3] Diana and Ryan Workman were married on January 1 of last
year. Diana has an eight-year-old son, Jorge, from her previous marriage. Ryan works as a
computer programmer at Datafile Inc. (DI) earning a salary of $96,000.
60. [LO 2] Olga is married and files a joint tax return with her husband. What amount of AMT
exemption may she deduct under the following alternative circumstances? (Use 2013 AMT
a. Her AMTI is $90,000.
Because Olga's AMTI does not exc