10. Abigail is a widow who is age 80 and blind. She is claimed as a dependent by her grandson. As to this situation, comment on the following issues.
a. Whether Abigail needs to file a Federal income tax return.
b. If Abigail files a return, the amounts of the personal exemption and standard deduction that she can claim.
13. Patsy maintains a household that includes her eldest son (age 30) and one of Patsy’s cousins (age 28). She can claim the cousin as a dependent but not her son. Explain.
15. Caden and Lily are divorced on March 3, 2011. For financial reasons, however, Lily continues to live in Caden’s apartment and receives her support from him. Caden does not claim Lily as a dependent on his 2011 Federal income tax return, but he does so on his 2012 return. Explain.
24. In connection with the application of the kiddie tax, comment on the following.
a. The child generates only earned income.
b. The child reports a modest amount of unearned income.
c. The child is age 20, not a student, and not disabled.
d. The child is married.
e. A parental election is made.
f. A parental election is made, and the married parents file separate returns.
30. Compute the taxable income for 2012 for Aiden on the basis of the following formation. Aiden is married but has not seen or heard from his wife since 2010.
40. Christopher died in 2010 and is survived by his wife, Chloe, and their 18-year-old son Dylan. Chloe is the executor of Christopher’s estate and maintains the household in which she and Dylan live. All of their support is furnished by Chloe. Dylan saves his earnings. Dylan reports the following information.
What is Chloe’s Federal income tax filing status for:
52. Each year, the Hundleys normally report itemized deductions of $10,000, including a $4,000 pledge payment to their church. Upon the advice of a friend, they do the following: in early January 2012, they pay their pledge for 2011; during 2012, they pay the pledge for 2012; and in late December 2012, they prepay their pledge for 2013.
a. Explain what the Hundleys are trying to accomplish.
b. What will be the tax saving if their marginal tax bracket is 25% for all three years? (Assume that the standard deduction amounts for 2012 and 2013 are the same.)
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