problem 1: Justin and Juna, ages 44 and 38, are married and file a joint return. In addition to have three dependent children (Jennifer, Joyce and Jacqueline), Justin and Juna have adjusted gross income (AGI) of $85,000 and itemized deductions of $20,000. Find out their taxable income for 2013?
a. $85,000
b. $65,000
c. $53,300
d. $45,500
problem 2: In year 2013, Alan, age 16, will have $300 of interest from a certificate of deposit and $5,000 from working as a waiter. Suppose Alan is claimed by his parents as a dependent. What is Alan’s standard deduction for 2013?
a. $300
b. $1,000
c. $5,350
d. $6,100
problem 3: What is Carlita’s taxable income for 2013? Suppose she is single and claimed two dependent children, Chase and Cassandra. Suppose further that Carlita’s AGI is $50,000 and that her itemized deductions are $10,000.
a. $50,000
b. $40,000
c. $32,200
d. $28,300
problem 4: What is Daenne’s Taxable Income for 2013? Suppose she is 45 years old and is single and has no dependents. Suppose further that Daenne’s AGI is $60,000 and that she made a charitable contribution of $1,000 (that would be her only itemized deduction).
a. $60,000
b. $59,000
c. $55,100
d. $50,000
problem 5: A few years ago, Ami and Alicia made a partnership termed “A-SQUARED.” Which of the given is most likely true regarding the U.S. income taxation of Ami, Alicia and A-SQUARED?
a. The A-SQUARED entity is NOT need to pay income taxes.
b. The A-SQUARED entity is NOT need to file an informational tax return.
c. Alicia and Ami are NOT need to pay taxes on their respective shares of A-SQUARED’s income unless (and until) A-SQUARED distributes its earnings to them
d. All the above.
problem 6: Which doctrine will most probable prevent Sandra from decreasing her tax liability by voluntarily assigning her income to the other taxpayer?
a. The constructive receipt doctrine
b. The fruit-of-the-tree doctrine
c. The economic benefit doctrine
d. None of above
problem 7: During the year 2013, Carlos was supported by his three wealthy CPA daughters, in the given percentages:
• Porshia: 25.0%
• Abena: 30.0%
• Ann: 9.0%
Which daughter is not able to claim Carlos as a dependent, even if a multiple support agreement is in place and the other daughters agree not to claim Carlos as a dependent?
a. Porshia
b. Abena
c. Ann
d. Each daughter would be eligible to claim Carlos as a dependent
problem 8: On January 1, 2013, Batista signed a 5 year lease to rent office space from Anthony. The lease commenced instantly on January 1, 2013. During the year 2013, Batista will pay Anthony, $12,000 for the first year’s rent, $1,000 for the last month’s rent, and $1,000 as a Security deposit. Batista and Anthony agree that the security deposit will not be returned by Anthony at the end of the lease. How much gross income must Anthony report for 2013 as a result of such items?
a. $61,000
b. $14,000
c. $13,000
d. $12,000
problem 9: What is Kevin’s taxable income for 2013? Suppose Kevin is 33 years old and is single and has no dependents. Suppose further that Kevin’s 2013 AGI is $75,000 and that he has no itemized the deductions.
a. $65,000
b. $68,900
c. $71,100
d. $75,000
problem 10: Mohammed, a single taxpayer, will have 2013 wages of $70,000 from his job at Big Company, Inc. Determine Mohammed’s AGI if he has the given (and only the given) additional items in 2013?
• Itemized deductions of $10,000
• Exemption amount of $3,900
• Alimony of $12,000 paid by Mohammed (to his previous spouse, Pharlande)
• Business income of $6,000 from Mohammed’s sole proprietorship
Avoid any deduction that might relate to self-employment taxes.
a. $76,000
b. $70,000
c. $64,000
d. $50,100