Income Tax Fundamentals 2023 41st Edition Solution Manual 2026–2027 – Complete Answers & Appendix by Whittenburg & Gill

Income Tax Fundamentals 2023, 41st Edition – Complete
Solution Manual with Appendix | Whittenburg & Gill |
2026–2027
All chapters covered

, CHAPTER 1 m




THE INDIVIDUAL INCOME TAX RETURN m m m m




Group 1 – Multiple Choice Questions
m m m m m




1. D The income tax includes elements of social
m m m m m m m 20. C Surviving spouse is preferred to head of m m m m m m




and economic policy (LO 1.1)
m m m m m household (LO 1.5)
m m m




2. C The income tax was authorized by the 16th
m m m m m m m 21. E Either Margaret or her sister (but not both) m m m m m m m




Amendment in 1913 (LO 1.1)
m m m m m may claim the mother as a dependent under
m m m m m m m m




3. C The 1040A and 1040-EZ no longer exist and
m m m m m m m
a multiple support agreement (LO 1.6)
m m m m m m




the 1120 is for corporations (LO 1.2)
m m m m m m m 22. D The daughter fails the age test to be a
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4. D Partnerships use Form 1065 to report
m m m m m m
qualifying child and she fails the gross
m m m m m m m




income tax information. A partner will
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income test ($4,400 in 2022) to be a
m m m m m m m m




report their share of income from a part-
m m m m m m m m
qualifying relative (LO 1.6)
m m m m




nership on a Form1040 (LO 1.2) m m m m m 23. D The child tax credit in 2022 is $2,000
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5. D Capital gains and losses are reported
m m m m m m
(LO 1.6) m m




directly on the face of the Form 1040
m m m m m m m m 24. B The child tax credit for the 13-year-old child is
m m m m m m m m




(from Schedule D) (LO 1.2)
m m m m m $2,000. The mother does not meet the
m m m m m m m




6. D A partnership is not generally a tax-paying
m m m m m m m
support test and cannot be claimed (LO 1.6)
m m m m m m m m




entity (LO 1.2)
m m m 25. B Must be age 16 or under for child tax credit
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7. C Student loan interest is a for AGI deduction. m m m m m m m
(LO 1.6) m m




The other responses are all itemized (from
m m m m m m m 26. A Head of household standard deduction plusm m m m m




AGI) deductions (LO 1.3)
m m m m additional standard deduction for age 65
m m m m m m




8. B The deduction for IRA contributions is a
m m m m m m
($19,400 + $1,750) (LO 1.7)
m m m m m




for AGI deduction (LO 1.3)
m m m m m 27. B Taxpayers age 65 or older are eligible
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9. D $98,000 – $13,000 (standard deduction is
m m m m m m
for an additional standard deduction
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less than itemized deductions) (LO 1.3)
m m m m m m
amount (LO 1.7) m m m




10. D For AGI adjustments are deducted to get
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28. B Taxpayers that are blind are eligible for an m m m m m m m




to AGI (LO 1.3)
m m m m
additional standard deduction amount
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11. B The larger of the two may be deducted
m m m m m m m
(LO 1.7) m m




(LO 1.3) m m
29. D Earned income plus $400 (LO 1.7)
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12. A An exclusion reduces gross income (LO 1.3)
m m m m m m
30. E Standard deduction may not exceed typical m m m m m




13. B Filing thresholds generally are the same as m m m m m m
amount (LO 1.7) m m m




the standard deduction amount (LO 1.4)
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31. D Business inventory is not considered a
m m m m m m




14. D Ben’s income would need to exceed the
m m m m m m m
capital asset (LO 1.8)
m m m m




standard deduction to require filing a tax
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32. A Gain of $15,000 ($25,000 amount realized
m m m m m m




return (LO 1.4)
m m m
less $10,000 adjusted basis) has been held
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15. D $25,900 + $1,400 (LO 1.4)
m m m m m m
for more than 12 months and is long-term
m m m m m m m m




(LO 1.8) m m


16. C Single dependent over 65 and blind thresh-
33. C $10,000 = $240,000 – ($270,000 – $40,000)
m m m m m m




old is $4,500 for unearned income (LO 1.4)
m m m m m m m
m m m m m m m




(LO 1.8) m m


17. C Joan qualifies as either single or head of
34. A $43,000 – $3,000. Net capital losses of up
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household; however, head of household
m m m m m
m m m m m m m m




is more advantageous (LO 1.5)
m m m m m
to $3,000 may be deducted from ordinary
m m m m m m m




income for individual taxpayers (LO 1.8)
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18. D Although Dorothy does not live with
m m m m m m




Glenda, since Dorothy is a parent that
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35. C Line 7 is capital gain or (loss) (LO 1.9)
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Glenda supports, Glenda may file as head
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36. B Preparers must get a signed authorization to
m m m m m m m




of household (LO 1.5)
m m m m
e-file from the taxpayer. (LO 1.10)
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19. D Taxpayer may file married filing jointly in
m m m m m m m
37. B About 90% of returns are filed electronically
m m m m m m m




year of spouse’s death (LO 1.5)
m m m m m m
(LO 1.10) m m




1-1

,
, 1-2 Chapter 1 – The Individual Income Tax Return m m m m m m m




Group 2 – Problems
m m m




1. a. Raising revenue to operate the government. m m m m m




b. Furthering economic goals such as reducing unemployment. m m m m m m




c. Furthering social goals such as encouraging contributions to charities. (LO 1.1)
m m m m m m m m m m




2. a. Form 1040 m




b. Schedule B m




c. Schedule D m




d. Schedule A m




e. Schedule 2 m




f. Schedule E m




g. Schedule 3 m




h. Schedule C m




i. Schedule 1 (LO 1.2) m m m




3. a. $36,300 = $42,000 + $300 – $6,000. m m m m m m




b. $25,900, the greater of itemized deductions or the standard deduction of $25,900.
m m m m m m m m m m m




c. $10,400 = $36,300 – $25,900. (LO 1.3) m m m m m m




4. a. $25,000.
b. $12,950, the greater of total itemized deductions or the standard deduction amount.
m m m m m m m m m m m




c. $12,050 = $25,000 – $12,950. (LO 1.3) m m m m m m




5. a. $53,800 = $54,000 + $2,800 – $3,000 ($7,000 capital loss limited to $3,000).
m m m m m m m m m m m m




b. $12,950
c. $40,850 = $53,800 – $12,950. (LO 1.3 and 1.8) m m m m m m m m




6. a. $47,500 = $48,000 + $2,500 – $3,000. m m m m m m




b. $25,900, the greater of itemized deductions or the standard deduction of $25,900.
m m m m m m m m m m m




c. $21,600 = $47,500 – $25,900. m m m m




d. $2,184 (Tax Table) (LO 1.3, 1.5, and 1.7)
m m m m m m m




7. Adjusted gross income m $18,000 m




Less:
m Itemized deductions
m m –2,400 m mm




Taxable income m $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
m m m m m m m m m m m m m m m m m m




spouse Tatiana itemizes her deductions, Marco must also itemize his deductions, even though the itemized
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deductions total is less than the standard deduction he would be otherwise entitled to. (LO 1.3, 1.5, and 1.7)
m m m m m m m m m m m m m m m m m m m




8. Adjusted gross income ($13,200 + $1,450)
m $14,650 m m m m m




Less: Standard deduction
m –12,950 m m




Taxable income m $ 1,700 m




(LO 1.3, 1.5, and 1.7)
m m m m




(Note: See Chapter 6 for the tax credit computation for dependent college students under age 24.)
m m m m m m m m m m m m m m m




9. a. $34,050 = $47,000 – $12,950. m m m m




b. Tax tables. Taxpayers with income up to $100,000 must use the tax tables.
m m m m m m m m m m m m




c. $3,884. (LO 1.3, 1.5, and 1.7) m m m m m




10. a. $66,000 = $50,000 + $8,000 + $5,000 + $3,000.
m m m m m m m m




b. $63,500 = $66,000 – $2,500. m m m m




c. $27,000, the greater of itemized deductions or the standard deduction of $25,900.
m m m m m m m m m m m




d. $36,500 = $63,500 – $27,000. m m m m




e. $3,972 (LO 1.3, 1.5, and 1.7) m m m m m