Question:
1- During the year, Addison is involved in the following transactions. What are the possible Federal income tax effects of these transactions?
*Lost money gambling on a recent trip to a casino.
*Helped pay for her neighbor''s dental bills. Howie is a good friend who is unemployed
*Received from the IRS a tax refund due to Addison''s overpayment of last year''s Federal income taxes.
*Paid a traffic ticket received while double parking to attend a business meeting.
*Contributed to the mayor''s reelection campaign. The mayor had promised Addison to rezone some of her land .
*Borrowed money from a bank to make a down payment on an automobile.
*Sold a houseboat and a camper on eBay. Both were personal use items, and the gain from one offset the loss from the other.
*Her dependent grandfather died on June 3of the year.
*Paid for Katherine`s funeral expenses.
*Paid premiums on her dependent son''s life insurance policy.
2- David is age 78, is a widower, and is being claimed as a dependent by his son. How does this situation affect the following?
a. David's own individual filing requirement
b. .b. David's personal exemption
c. .c. The standard deduction allowed to David
d. .d. The availability of any additional standard deduction
3- Comment on the availability of head-of-household filing in each of the following independent situations.
a) Taxpayer lives alone but maintains the household of his parents.In July the parents use their savings to purchase a Lexus automobile for $62,000
b) Bree maintains a home in which she and her father live . The father then enters a nursing facility for treatment for a mental illness
c) Chloe a single parent maintains a home in which she and Dean . Chloe`s unmarried son live . Dean age 18 earn$5,000 from a part time job
d) Assume the same facts as in (c) except that Dean is age 19 not 18.
e) Chee is married and maintains a household in which he and his dependent stepsonlive.
3- Compute Emily's 2014 taxable income on the basis of the following information. Her filingstatus is single Salary $85,000
Interest income from bonds issued by Xerox $1,100
Alimony payments received $6,000
Contribution to traditional IRA $5,500
Gift from parents $25,000
Capital gain from stock investment, held for 7months $2,000
Amount lost in office pool (sport gambling is illegal where Emily lives) $500
Number of potential dependents (two cousins, who live in Canada) ?
Age 40
4- Roy and Brandi are engaged and plan to get married. Roy is a full-time student and earns $9,000 from a part-time job. With the income, students loans, savings, and nontaxable scholoarships, he is self-supporting. For the year, Brandi is employed and reports $61,000 in wages. How much Federal income tax, if any, can Brandi save if she and Roy marry in 2014. and file a joint return?