Ac553

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AC553 – Keller School of Management
3-31
Tom and Linda are married taxpayers who file a joint return. They have itemized deductions of $11,950 and four exemptions. Assuming an AGI of $40,000, what is their taxable income for 2011?
40000-11950 = 28050 – (3404 x 4) = 14434

The answer is 14434

3-32
Compute Marie's taxable income for 2011, assuming she is single and claims two dependent children. Her AGI is $70,000 and she has itemized deduction of $9,000
Marie has 70,000 of AGI, to find her taxable income, you need to subtract her itemized deductions ($9000--which are larger than her standard deduction, whether filing single or Head of Household) and subtract her exemptions for herself, and two dependents. Since each exemption in 2011 is worth $3400, she will subtract 10,200.
So 70,000 - 9000 – (3650 x 3) = $50,050 taxable income.
3-36
Compute Stanley's taxable income for 2011, assuming he has $1,000 in wages from working in a grocery store and $2,000 in interest income from some bonds he owns. Stanley, age 16, is claimed as a dependent on his parents' return

Duke‘s and Pat Collins have adjusted gross income of $500,000. They have itemized deductions of $20,000 consisting of $8,000 in medical expenses that exceed 71/2% of adjusted gross income, $3,000 in property taxes, $4,000 in housing interest, and $5,000 in miscellaneous itemized deductions that exceed 2 percent of adjusted gross income. What is the amount of their itemized deductions?
Because their AGI exceeds $166800 the amount of itemized deductions that they can claim are reduced by $3,200 so they can only claim $16,800.
.03(500000-166800)= 9996
20000 –(9996/3) = 16668

13-55

Mr. Z, a nondealer, sold assets on an installment plan. Determine Mr. Z's gross income for 2011. Relevant data include:

Year Installment Sales Gross Profit 2011 Collections
2009 200,000 50,000…...

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