Solutions Manual for
Income Tax
Fundamentals 41st
Edition By Gerald
Whittenburg, Steven
Gill
,Solutions Manual for Income Tax Fundamentals 2023 41st Edition By Gerald Whittenburg, Steven Gill
CHAPTER 1
THE INDIVIDUAL INCOME TAX RETURN
G (LO 1.5)
Group 1 – Multiple Choice Questions
19. lD Taxpayer may file married filing jointly
1. D The income tax includes elements of e in year of spouse’s death (LO 1.5)
social and economic policy (LO 1.1) n
2. C The income tax was authorized by the d
16th Amendment in 1913 (LO 1.1) a
3. C The 1040A and 1040-EZ no longer exist
s
and the 1120 is for corporations (LO 1.2)
u
4. D Partnerships use Form 1065 to p
report income tax information. A p
partner will report their share of o
income from a part- nership on a r
Form1040 (LO 1.2) t
5. D Capital gains and losses are s
reported directly on the face of the ,
Form 1040 (from Schedule D) (LO
1.2) G
6. D A partnership is not generally a tax- l
paying entity (LO 1.2) e
7. C Student loan interest is a for AGI n
deduction. The other responses are all d
itemized (from AGI) deductions (LO 1.3) a
8. B The deduction for IRA contributions is m
a for AGI deduction (LO 1.3) a
9. D $98,000 – $13,000 (standard deduction y
is less than itemized deductions) (LO
1.3) f
10. D For AGI adjustments are deducted to i
get to AGI (LO 1.3) l
11. B The larger of the two may be e
deducted (LO 1.3)
a
12. A An exclusion reduces gross income (LO s
1.3)
13. B Filing thresholds generally are the same h
as the standard deduction amount (LO e
1.4) a
14. D Ben’s income would need to exceed d
the standard deduction to require
filing a tax return (LO 1.4) o
15. D $25,900 + $1,400 (LO 1.4) f
16. C Single dependent over 65 and blind
h
thresh- old is $4,500 for unearned
o
income (LO 1.4)
u
17. C Joan qualifies as either single or head s
of household; however, head of e
household is more advantageous (LO h
1.5) o
18. D Although Dorothy does not live with l
Glenda, since Dorothy is a parent that d
, 1.5)
21. E Either Margaret or her sister (but not
20. C both) may claim the mother as a
dependent under a multiple support
S agreement (LO 1.6)
22. uD The daughter fails the age test to be
r a qualifying child and she fails the
v gross income test ($4,400 in 2022)
i to be a qualifying relative (LO 1.6)
v
23. iD The child tax credit in 2022 is
n $2,000 (LO 1.6)
24. gB The child tax credit for the 13-year-old
child is $2,000. The mother does not
s meet the support test and cannot be
p claimed (LO 1.6)
25. oB Must be age 16 or under for child tax
u credit (LO 1.6)
26. sA Head of household standard deduction
e plus additional standard deduction for
age 65 ($19,400 + $1,750) (LO 1.7)
i
27. sB Taxpayers age 65 or older are
eligible for an additional standard
p deduction amount (LO 1.7)
28. rB Taxpayers that are blind are eligible
e for an additional standard deduction
f amount (LO 1.7)
29. eD Earned income plus $400 (LO 1.7)
30. rE Standard deduction may not exceed
r typical amount (LO 1.7)
e
31. dD Business inventory is not considered
a capital asset (LO 1.8)
32. tA Gain of $15,000 ($25,000 amount
o realized less $10,000 adjusted basis)
has been held for more than 12 months
h and is long-term (LO 1.8)
33. eC $10,000 = $240,000 – ($270,000 –
a $40,000) (LO 1.8)
34. dA $43,000 – $3,000. Net capital losses of
up to $3,000 may be deducted from
o ordinary income for individual
f taxpayers (LO 1.8)
35. C Line 7 is capital gain or (loss) (LO 1.9)
h
36. oB Preparers must get a signed
u authorization to e-file from the
s taxpayer. (LO 1.10)
37. eB About 90% of returns are filed
h electronically (LO 1.10)
1-1 o
l
d
(
L
O
, 1-4 Chapter 1 – The Individual Income Tax Return
Group 2 – Problems
1. a. Raising revenue to operate the government.
b. Furthering economic goals such as reducing unemployment.
c. Furthering social goals such as encouraging contributions to charities. (LO 1.1)
2. a. Form 1040
b. Schedule B
c. Schedule D
d. Schedule A
e. Schedule 2
f. Schedule E
g. Schedule 3
h. Schedule C
i. Schedule 1 (LO 1.2)
3. a. $36,300 = $42,000 + $300 – $6,000.
b. $25,900, the greater of itemized deductions or the standard deduction of $25,900.
c. $10,400 = $36,300 – $25,900. (LO 1.3)
4. a. $25,000.
b. $12,950, the greater of total itemized deductions or the standard deduction amount.
c. $12,050 = $25,000 – $12,950. (LO 1.3)
5. a. $53,800 = $54,000 + $2,800 – $3,000 ($7,000 capital loss limited to $3,000).
b. $12,950
c. $40,850 = $53,800 – $12,950. (LO 1.3 and 1.8)
6. a. $47,500 = $48,000 + $2,500 – $3,000.
b. $25,900, the greater of itemized deductions or the standard deduction of $25,900.
c. $21,600 = $47,500 – $25,900.
d. $2,184 (Tax Table) (LO 1.3, 1.5, and 1.7)
7. Adjusted gross income
$18,00
0 Less: Itemized deductions –
2,400
Taxable income $15,600
Marco’s tax liability from the Tax Table is $1,670. Note: because they are married and filing separately and
Mar- co’s spouse Tatiana itemizes her deductions, Marco must also itemize his deductions, even though
the itemized deductions total is less than the standard deduction he would be otherwise entitled to. (LO
1.3, 1.5, and 1.7)
8. Adjusted gross income ($13,200 + $1,450) $
14,650 Less:
Standard deduction –
12,950
Taxable income $ 1,700
(LO 1.3, 1.5, and 1.7)
(Note: See Chapter 6 for the tax credit computation for dependent college students under age 24.)
9. a. $34,050 = $47,000 – $12,950.
b. Tax tables. Taxpayers with income up to $100,000 must use the tax tables.
c. $3,884. (LO 1.3, 1.5, and 1.7)
10. a. $66,000 = $50,000 + $8,000 + $5,000 + $3,000.
b. $63,500 = $66,000 – $2,500.
c. $27,000, the greater of itemized deductions or the standard deduction of $25,900.
d. $36,500 = $63,500 – $27,000.
Income Tax
Fundamentals 41st
Edition By Gerald
Whittenburg, Steven
Gill
,Solutions Manual for Income Tax Fundamentals 2023 41st Edition By Gerald Whittenburg, Steven Gill
CHAPTER 1
THE INDIVIDUAL INCOME TAX RETURN
G (LO 1.5)
Group 1 – Multiple Choice Questions
19. lD Taxpayer may file married filing jointly
1. D The income tax includes elements of e in year of spouse’s death (LO 1.5)
social and economic policy (LO 1.1) n
2. C The income tax was authorized by the d
16th Amendment in 1913 (LO 1.1) a
3. C The 1040A and 1040-EZ no longer exist
s
and the 1120 is for corporations (LO 1.2)
u
4. D Partnerships use Form 1065 to p
report income tax information. A p
partner will report their share of o
income from a part- nership on a r
Form1040 (LO 1.2) t
5. D Capital gains and losses are s
reported directly on the face of the ,
Form 1040 (from Schedule D) (LO
1.2) G
6. D A partnership is not generally a tax- l
paying entity (LO 1.2) e
7. C Student loan interest is a for AGI n
deduction. The other responses are all d
itemized (from AGI) deductions (LO 1.3) a
8. B The deduction for IRA contributions is m
a for AGI deduction (LO 1.3) a
9. D $98,000 – $13,000 (standard deduction y
is less than itemized deductions) (LO
1.3) f
10. D For AGI adjustments are deducted to i
get to AGI (LO 1.3) l
11. B The larger of the two may be e
deducted (LO 1.3)
a
12. A An exclusion reduces gross income (LO s
1.3)
13. B Filing thresholds generally are the same h
as the standard deduction amount (LO e
1.4) a
14. D Ben’s income would need to exceed d
the standard deduction to require
filing a tax return (LO 1.4) o
15. D $25,900 + $1,400 (LO 1.4) f
16. C Single dependent over 65 and blind
h
thresh- old is $4,500 for unearned
o
income (LO 1.4)
u
17. C Joan qualifies as either single or head s
of household; however, head of e
household is more advantageous (LO h
1.5) o
18. D Although Dorothy does not live with l
Glenda, since Dorothy is a parent that d
, 1.5)
21. E Either Margaret or her sister (but not
20. C both) may claim the mother as a
dependent under a multiple support
S agreement (LO 1.6)
22. uD The daughter fails the age test to be
r a qualifying child and she fails the
v gross income test ($4,400 in 2022)
i to be a qualifying relative (LO 1.6)
v
23. iD The child tax credit in 2022 is
n $2,000 (LO 1.6)
24. gB The child tax credit for the 13-year-old
child is $2,000. The mother does not
s meet the support test and cannot be
p claimed (LO 1.6)
25. oB Must be age 16 or under for child tax
u credit (LO 1.6)
26. sA Head of household standard deduction
e plus additional standard deduction for
age 65 ($19,400 + $1,750) (LO 1.7)
i
27. sB Taxpayers age 65 or older are
eligible for an additional standard
p deduction amount (LO 1.7)
28. rB Taxpayers that are blind are eligible
e for an additional standard deduction
f amount (LO 1.7)
29. eD Earned income plus $400 (LO 1.7)
30. rE Standard deduction may not exceed
r typical amount (LO 1.7)
e
31. dD Business inventory is not considered
a capital asset (LO 1.8)
32. tA Gain of $15,000 ($25,000 amount
o realized less $10,000 adjusted basis)
has been held for more than 12 months
h and is long-term (LO 1.8)
33. eC $10,000 = $240,000 – ($270,000 –
a $40,000) (LO 1.8)
34. dA $43,000 – $3,000. Net capital losses of
up to $3,000 may be deducted from
o ordinary income for individual
f taxpayers (LO 1.8)
35. C Line 7 is capital gain or (loss) (LO 1.9)
h
36. oB Preparers must get a signed
u authorization to e-file from the
s taxpayer. (LO 1.10)
37. eB About 90% of returns are filed
h electronically (LO 1.10)
1-1 o
l
d
(
L
O
, 1-4 Chapter 1 – The Individual Income Tax Return
Group 2 – Problems
1. a. Raising revenue to operate the government.
b. Furthering economic goals such as reducing unemployment.
c. Furthering social goals such as encouraging contributions to charities. (LO 1.1)
2. a. Form 1040
b. Schedule B
c. Schedule D
d. Schedule A
e. Schedule 2
f. Schedule E
g. Schedule 3
h. Schedule C
i. Schedule 1 (LO 1.2)
3. a. $36,300 = $42,000 + $300 – $6,000.
b. $25,900, the greater of itemized deductions or the standard deduction of $25,900.
c. $10,400 = $36,300 – $25,900. (LO 1.3)
4. a. $25,000.
b. $12,950, the greater of total itemized deductions or the standard deduction amount.
c. $12,050 = $25,000 – $12,950. (LO 1.3)
5. a. $53,800 = $54,000 + $2,800 – $3,000 ($7,000 capital loss limited to $3,000).
b. $12,950
c. $40,850 = $53,800 – $12,950. (LO 1.3 and 1.8)
6. a. $47,500 = $48,000 + $2,500 – $3,000.
b. $25,900, the greater of itemized deductions or the standard deduction of $25,900.
c. $21,600 = $47,500 – $25,900.
d. $2,184 (Tax Table) (LO 1.3, 1.5, and 1.7)
7. Adjusted gross income
$18,00
0 Less: Itemized deductions –
2,400
Taxable income $15,600
Marco’s tax liability from the Tax Table is $1,670. Note: because they are married and filing separately and
Mar- co’s spouse Tatiana itemizes her deductions, Marco must also itemize his deductions, even though
the itemized deductions total is less than the standard deduction he would be otherwise entitled to. (LO
1.3, 1.5, and 1.7)
8. Adjusted gross income ($13,200 + $1,450) $
14,650 Less:
Standard deduction –
12,950
Taxable income $ 1,700
(LO 1.3, 1.5, and 1.7)
(Note: See Chapter 6 for the tax credit computation for dependent college students under age 24.)
9. a. $34,050 = $47,000 – $12,950.
b. Tax tables. Taxpayers with income up to $100,000 must use the tax tables.
c. $3,884. (LO 1.3, 1.5, and 1.7)
10. a. $66,000 = $50,000 + $8,000 + $5,000 + $3,000.
b. $63,500 = $66,000 – $2,500.
c. $27,000, the greater of itemized deductions or the standard deduction of $25,900.
d. $36,500 = $63,500 – $27,000.
