Solution manual with appendix for income tax fundamentals 2023 41st edition by gerald e whittenburg steven gill

CHAPTERu1

THEu INDIVIDUALu INCOMEu TAXu RETURN
u
payerumayufileumarriedufilingujointlyuinuye
Groupu 1u –u Multipleu Choiceu Questions s
aruofuspouse’sudeathu(LOu1.5)
u
1. DuTheuincomeutaxuincludesuelementsuofusocialua p
ndueconomicupolicyu(LOu1.1) p
2. C o
Theuincomeutaxuwasuauthorizedubyut r
heu16thuAmendmentuinu1913u(LOu1.1) t
3. C Theu 1040Au andu 1040- s
EZu nou longeru existu andutheu1120uisuforucorpo ,
u
rationsu(LOu1.2) G
4. DuPartnershipsuuseuFormu1065utoureportuin l
comeutaxuinformation.uAupartneru willurep e
ortu theiru shareu ofu incomeu fromu au part- n
unershipuonuauForm1040u(LOu1.2) d
5. DuCapitalugainsuandulossesuareureportedud a
u
irectlyuonutheufaceuofutheuFormu1040u( m
fromuScheduleuD)u(LOu1.2) a
6. DuAupartnershipuisunotugenerallyuautax- y
u
payinguentityu(LOu1.2)
f
7. C i
StudentuloanuinterestuisuauforuAGIude l
duction.uTheuotheruresponsesuareualluitemize e
du(fromuAGI)udeductionsu(LOu1.3) u

a
8. B s
Theu deductionu foru IRAu contributi u

onsu isu auforuAGIudeductionu(LOu1.3) h
9. Du $98,000u– e
u$13,000u(standardudeductionuisulessu than
a
u itemizedu deductions)u (LOu 1.3)
d
u

10. DuForuAGIuadjustmentsuareudeductedutougetut o
ouAGIu(LOu1.3) f
u
11. B h
Theulargeruofutheutwoumayubeud o
eductedu(LOu1.3) u
12. A Anuexclusionu reducesu grossuincomeu (LOu1.3) s
13. B e
Filinguthresholdsugenerallyuareutheu h
sameuasutheustandardu deductionu amountu ( o
LOu 1.4) l
d
14. DuBen’suincomeuwoulduneedutouexceedutheusta u

ndardudeductionutourequireufilinguautaxure (
turnu(LOu1.4) L
O
15.u Du $25,900u+u$1,400u(LOu1.4) u

16. C Singleudependentuoveru65uandublinduthresh- 1
uoldu isu $4,500u foru unearnedu incomeu (LOu 1.4
.
) 5
)
17. CuJoanuqualifiesuasueitherusingleuoruheaduofuh
ousehold;uhowever,uheaduofuhouseholdui 19. D
u
sumoreuadvantageousu(LOu1.5) T
18. DuAlthoughuDorothyudoesunotuliveuwithuGlen a
da,usinceuDorothyuisuauparentuthatuGlenda x

, Eitheru Margaretu oru heru sisteru(butu notu both)u
mayuclaimutheumotheruasuaudependentuunde
20. C ruaumultipleusupportuagreementu(LOu1.6)
22. DuTheudaughterufailsutheuageutestutoubeuauq
S ualifyinguchilduandusheufailsutheugrossui
u ncomeutestu($4,400uinu2022)utoubeuauq
r ualifyingurelativeu(LOu1.6)
23. vDu Theuchildutaxucredituinu2022uisu$2,000u(
i LOu1.6)
v
24. iB Theuchildu taxu creditu forutheu 13-year-
n oldu childuisu$2,000.uTheumotherudoesunotum
g eetutheusupportutestu andu cannotubeu claimedu(
u LOu 1.6)
s
25. B
p
Mustubeuageu16uoruunderuforuchildutaxucredi
o
tu(LOu1.6)
u
26. sA
e Headuofuhouseholdustandardudeductionuplu
u suadditionalustandardudeductionuforuageu65u(
i $19,400u+u$1,750)u(LOu1.7)
s
27. uBuTaxpayersuageu65uoruolderuareueligibleuf
p oruanuadditionalustandardudeductionu
r amountu(LOu1.7)
28. eB
f Taxpayersuthatuareublindu areueligibleuforua
e nuadditionalustandardudeductionuamountu(
r LOu1.7)
r
29. eDu Earneduincomeuplusu$400u(LOu1.7)
30. dE
u
Standardudeductionumayunotuexceedutypica
t luamountu(LOu1.7)
o
31. uDu Businessuinventoryuisunotuconsidereduauc
h apitaluassetu(LOu1.8)
32. eAuGainuofu$15,000u($25,000uamounturealizedule
a
ssu$10,000uadjustedubasis)uhasubeenuheldufo
d
u rumoreuthanu12umonthsuanduisulong-
o termu(LOu1.8)
f u$10,000u=u$240,000u–u($270,000u–
33.uC
u

h u$40,000)u(LOu1.8)
34. oAu $43,000u–
u u$3,000.u Netucapitalulossesuofuuputou$3,000
s umayubeudeductedufromuordinaryuincomeu
e foruindividualutaxpayersu(LOu1.8)
35. hCu Lineu7uisucapitalugainuoru(loss)u(LOu1.9)
o
36. lBuPreparersumustugetuausigneduauthorizationutoue
d -fileufromutheutaxpayer.u(LOu1.10)
37. uBuAboutu90%uofureturnsuareufileduelectronicallyu(
( LOu1.10)
1-1 L
O
u

1
.
5
)
21. E

,
, 1-2 Chapteru 1u –u Theu Individualu Incomeu Taxu Return



Groupu 2u –u Problems
1. a. Raisingurevenueutouoperateutheugovernment.
b. Furtheringueconomicugoalsusuchuasureducinguunemployment.
c. Furtheringusocialu goalsusuchu asuencouragingucontributionsutou charities.u (LOu 1.1)
2. a. Formu1040
b. Scheduleu B
c. Scheduleu D
d. ScheduleuA
e. Scheduleu2
f. ScheduleuE
g. Scheduleu3
h. Scheduleu C
i. Scheduleu1u (LOu1.2)
3.u a. $36,300u=u$42,000u+u$300u–u$6,000.
b. $25,900,u theu greateru ofu itemizedu deductionsu oru theu standardu deductionu ofu $25,900.
c. $10,400u=u$36,300u–u$25,900.u (LOu1.3)
4.u a. $25,000.
b. $12,950,u theu greateru ofu totalu itemizedu deductionsu oru theu standardu deductionu amount.
c. $12,050u=u$25,000u–u$12,950.u (LOu 1.3)
5.u a. $53,800u=u$54,000u+u$2,800u–
u$3,000u($7,000ucapitalulossulimited utou$3,000).ub. $12,950

c. $40,850u=u$53,800u–u$12,950.u (LOu1.3uandu1.8)
6.u a. $47,500u=u$48,000u+u$2,500u–u$3,000.
b. $25,900,u theu greateru ofu itemizedu deductionsu oru theu standardu deductionu ofu $25,900.
c. $21,600u =u $47,500u –u $25,900.
d.u $2,184u(TaxuTable)u (LOu1.3,u1.5,uandu1.7)
7. Adjustedugrossuincome
$18,000uLess:
Itemizedudeductions –2,400
Taxableuincome $15,600
Marco’sutaxuliabilityufromutheuTaxuTableuisu$1,670.uNote:ubecauseutheyuareumarrieduandufilinguseparatelyuanduMar
-
uco’su spouseuTatianauitemizesuherudeductions,u Marcou mustualsouitemizeuhisu deductions,u evenuthoughutheuitemize

dudeductionsutotaluisulessuthanutheustandardudeductionuheuwouldubeuotherwiseuentitleduto.u(LOu1.3,u1.5,uandu1.7)
8.u Adjustedugrossuincomeu($13,200u+u$1,450)
$u14,650uLess:
Standardudeduction –12,950
Taxableuincome $u 1,700
(LOu1.3,u1.5,uandu1.7)
(Note:uSeeuChapteru6uforutheutaxucreditucomputationuforudependentucollegeustudentsuunderuageu24.)
9.u a. $34,050u =u $47,000u –u $12,950.
b. Taxutables.u Taxpayersuwithuincomeuuputou$100,000umustuuseutheutaxutables.
c. $3,884.u (LOu1.3,u1.5,uandu1.7)
10.u a.
$66,000u=u$50,000u+u$8,000u+u$5,000u+u$3,000
.ub. $63,500u=u$66,000u–u$2,500.
c. $27,000,u theu greateru ofu itemizedu deductionsu oru theu standardu deductionu ofu $25,900.
d.u u $36,500u=u $63,500u–u $27,000.
e. $3,972u (LOu1.3,u1.5,uandu1.7)