Acct 323 7980 income tax i (spring 2016) quiz i 1) under a


ACCT 323 7980 INCOME TAX I (Spring 2016)  


1) Under a divorce agreement executed this year, an ex-wife receives from her ex-husband cash of $25,000 annually for ten years.  The agreement does not say that the payments are excludible from gross income.  Does the ex-wife have gross income and, if so, how much?  Can the exhusband deduct the annual payments and, if so, is the deduction For AGI or From AGI?  What Internal Revenue Code Sections answer these questions? 

2)  According to the AICPA’s Statements on Standards for Tax Services, what duties does a tax practitioner owe to her client? 

3)  Why is a thorough knowledge of tax law sources important to a professional tax practitioner? 

4)  May a taxpayer claim a dependency exemption for a person if the taxpayer provides 50% or less of the person’s support.  If so, under what circumstances? 

5)  In 2015, Justin, a single 18-year old taxpayer, received a salary of $1,800 and interest income of $1,600.  He had $600 in itemized deductions.  Calculate Justin’s taxable income assuming he is (a) self-supporting and (b) a dependent of his parents. 

6)  Jerry and Jenny are a married couple.  They provided financial assistance to several persons during 2015.  For the situations below, determine whether the individuals qualify as dependency exemptions for Jerry and Jenny on their 2015 Married Filing Joint tax return.  Assume in each case that dependency tests not mentioned have been satisfied. 

 (a)  Brian, age 24, is Jerry and Jenny’s son.  Brian is a full-time student, and he lives in an  apartment near the college.  Jerry and Jenny provide over 50% of Brian’s support.  Brian   worked as a stock clerk in a super market and earned $4,500. 

 (b)  Same facts as above, except that Brian is a part-time student. 

 (c)  Sheila, age 22, is Jerry and Jenny’s daughter.  She’s a full-time student and lives in   a college dormitory.  Jerry and Jenny provide over 50% of Sheila’s support.  Sheila  works part-time as an accounting clerk, and she earned $5,000. 

 (d)  Same facts as in (c), except that Sheila is a part-time student. 

 (e)  Grandma, age 82, is Jenny’s grandmother, and she lives with Jerry and Jenny.  In  2015, Grandma’s only income was her Social Security of $4,800 and interest on U.S.  bonds of $4,500.  Grandma uses her income to pay 45% of her total support, and Jerry  and Jenny provide the rest of Grandma’s support.  

7)  In general what factors determine who must file a federal income tax return?  Is an individual required to file a tax return if he or she owes no tax?  If an individual is not required to file a federal income tax return, are there situations in which the individual might want to file.  Explain. 

8)  John and Joan had been married for 20 years before John died in October 2013.  Joan and her son Marley, age 21, continued to live at home in years 2013 – 2016.  Marley worked part-time (earning $5,000 in each of the four years).  He also attended college on a part-time basis.  Joan provided more than 50% of Marley’s support in each year.  What is Joan’s filing status for 2013, 2014, 2015, and 2016?  Would Joan’s filing status change if Marley attended school full-time rather than part-time?  If so, how?   

9)  Wanda is a single parent who maintained a household for her unmarried son Jordan, age 19, who worked full-time and earned $16,000.  Wanda provided about 40% of Jordan’s support but provided all the expenses of maintaining the household.  What is Wanda’s 2015 tax filing status? 

10)  Tom and Mary are married and have one dependent son.  In April, Tom left Mary a note that he needed his freedom and was leaving her.  As of December, Mary has neither heard from nor seen Tom.  Mary fully supported her son and completely maintained the household.  What is Mary’s filing status? 

11)  Jake and Janice are a married couple with two dependent children.  In 2015, their salaries totaled $130,000, and they suffered a capital loss of $8,000.  They also received $1,000 of taxexempt interest.  They paid home mortgage interest of $10,000, state income taxes of $4,000, and medical expenses of $3,000.  They also contributed $5,000 to charity.  On their 2015 Married Filing Joint tax return what is their (a) adjusted gross income; (b) their total itemized deductions; (c) the amount of their exemptions; and (d) their taxable income. 

12)  Chinita is a single taxpayer, whose salary was $51,000 in 2015.  In that year, she also suffered a $5,000 short-term capital loss.  Her itemized deductions for the year totaled $4,000.  What are Chinita’s 2015 (a) adjusted gross income; (b) taxable income; and (c) tax liability? 

13)  In general, when is income treated as earned by an accrual basis taxpayer? 

14)  Jean owns a small unincorporated business.  Her 15-year-old son Bernardo works part-time in the business and was paid wages of $3,000 in the current year.  Who is taxed on his earnings, Bernardo or Jean?  Explain.      

15)  Geraldo rented an office building to Brian for $3,000 per month.  On 12/29/14, Geraldo received a deposit of $4,000 in addition to the first and last months’ rent.  Brian commenced occupancy of the building on 1/02/15.  On 7/15/15, Brian closed his business and filed for bankruptcy.  Geraldo collected rent for February, March, and April on the first day of each month.  He received the May rent on 5/10/14, but collected no payments thereafter.  Geraldo withheld $800 from Brian’s deposit because of damage to the property and $1,500 for unpaid rent.  He refunded the balance of the deposit to Brian.  What amount of the above payments should Geraldo have reported as gross income in 2014 and 2015? 

16)  Flowers, a married taxpayer, purchased an annuity for $64,400 that will pay $700 per month over the life of Flowers and Flowers’ spouse. At the time of purchase, the couple’s joint life expectancy was 23 years. Flowers received payment beginning April 1, Year 1, amounting to $6,300 in the first year of the annuity contract. How much is includable in Flowers’ gross income in the first year?    

a. $0  b. $2,100  c. $4,200  d. $6,300 

17)  Ingrid inherited $10,000 of City of Baltimore, Maryland bonds in February.  In March she received interest of $500 on the bonds, and in April she sold the bonds for a $200 gain.  Ingrid redeemed Series EE U.S. Savings Bonds that she had purchased several years ago.  The accumulated interest totaled $800.  Ingrid also received $300 of interest on bonds issued by the City of Montreal, Canada.  What amount of these receipts, if any, should Ingrid include in her gross income. 

18)  For each of the following, indicate whether the amount is taxable: 

 (a)  Katrina won $3000 in the state lottery. 

 (b)  Robert won a $500 prize for his entry in a poetry contest. 

 (c)  Lizbeth was awarded $2,000 when she was selected “Teacher of the Year” by her  local school district. 

19)  In each of the following situations, what amount must be included in the taxpayer’s gross income? 

 (a)  Laverne received a $1,500 tuition scholarship to attend Fredonia Law School.  In  addition, Fredonia paid Laverne $4,000 per year to work part-time in the campus  cafeteria. 

 (b)  Marvin received a $10,000 football scholarship for attending Western University.   His scholarship covered tuition, room, board, laundry, and books.  $4,000 of the  scholarship was designated for room and board and laundry.  It was understood that  Marvin would participate in the school’s intercollegiate football program, but he was not  required to do so. 

 (c)  Nightingale Nursing School requires all third-year students to work 20 hours per  week at an affiliated local hospital.  Each student is paid $10 per hour.  Ruth, a third-year  student, earned $10,000 for such work during the year. 

20)  Lamar Corp. has four employees, for whom it provides group life insurance in accordance with a non-discrimination policy.  The details are: 

  Employee   Age Key Employee     Coverage   Premiums      Sandy   62        Yes      $200,000       $4,000      Randy   52        Yes         40,000           700      Mandy   33        No         80,000           600      Candy   33        No         40,000           300  

(a)  How much may Lamar deduct for group term life insurance premiums? 

(b)  How much income must be reported by each employee? 

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with Australia Assessments
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
excellent work
Customer 456821, June 18th, 2022
IT, Web
The new writer was amazing and followed the instructions perfectly! Thank you so much for tackling all requirements on short notice and a HUGE thank you to the support team for remaining in contact with me until a resolution was received.
Customer 452455, January 13th, 2023
Business and administrative studies
Good work.
Customer 459947, June 4th, 2022
Business and administrative studies
Good work.
Customer 458115, May 10th, 2022
Human Resources Management (HRM)
Good work.
Customer 462499, May 29th, 2022
Very good job! I really appreciate the work and effort you've done. it helped me a lot. the feedback has been followed one by one and I appreciate that! I will assign you for future work, and I will be sending a tip soon!
Customer 462787, August 1st, 2022
Business Studies
Great job!
Customer 462533, April 10th, 2022
Customer 463869, May 25th, 2023
Good job
Customer 456821, May 13th, 2022
MGMT 221 Introduction to Management Information System
Great job!
Customer 457731, February 25th, 2022
English 101
Excellent work.
Customer 460547, April 5th, 2022
Thank you for following and revising all the comments. Keep it up
Customer 463249, February 28th, 2023
Customer reviews in total
Current satisfaction rate
3 pages
Average paper length
Customers referred by a friend
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat