Acc499 Bachelors Capstone in Accounting: Unit 7 Assignment - Federal Taxation

Acc499 Bachelors Capstone in Accounting
Unit 7 Assignment (Federal Taxation)

Question # 1:
For each of the following cases, indicate the filing status for the taxpayers for 2012 use the following legend:
A - Single
B - Married, filing a joint return
C - Married, filing separate returns
D - Head of household
E - Qualifying widow(er)

a. Billie is single and she supports her mother (who has no income), including paying all the costs of her housing in an apartment across town.
b. Mike is single and he has a dependent child living in his home
c. Albert is single and he supports his 30-year-old brother, who lives in his own home
d. Len's final decree of divorce was granted on June 18, 2012.She has no dependents.
e. Ted and Alice were married on December 31, 2012.

Question # 2:
Indicate, in each of the following situations, the number of exemptions the taxpayers are entitled to claim on their 2012 income tax returns.
a. Della, a 20-year-old single taxpayer, supports her mother, who lives in her own home. Her mother has income of $1,350.
b. Wyle, age 43, and Missie, age 45, are married and support Wyle's 19-year-old sister, who is not a student. The sister's income from a part-time job is $3,700.
c. Deewas divorced in 2012 and receives child support of $250/month from her ex-husband for support of their 8-year-old son, J.J., who lives with her.Deeis 45 and provides more than 1/2 of her son's support.

Question # 3:
How much of each of the following prize or award is taxable?
a. Cherie received a $50,000 gift bag at the Oscars in 2010.
b. Bon Von Joannie received a gold watch worth $350 for 25 years of service to his accounting firm,
c. Kellie won $1,000,000 in her state lottery.
d. Debra is a professor who received $50,000 as an award for her scientific research from the University that employs her.

Question # 4:
Stewie loaned a friend $12,500 to buy some stock 3 years ago. In the current year the debt became worthless.
a. How much is Stewie's deduction for the bad debt for this year? (Assume he has no other capital gains or losses.)
b. What can Stewie do with the deduction not used this year?

Question # 5:
Ken paid the following amounts for interest during 2012:
Qualified interest on home mortgage $4,700
Auto loan interest 850
“Points” on mortgage for acquisition of personal residence. 300
Service charges on his checking account 40
Mastercard interest 300
Calculate Ken's itemized deduction for interest on Schedule A.

Question # 6:
Jerry made the following contributions during 2012:
His synagogue (by check) $980
The Republican Party (by check) 180
The American Red Cross (by check) 150
His lodge for a holiday party 100
In addition, Jerry donated used furniture to the Salvation Army costing $2,000 with a fair market value of $400. Assuming Jerry has adjusted gross income of $45,000, has the necessary written acknowledgments, and itemizes deductions.
Compute the amount that would be eligible for the Gifts to Charity section of Schedule A, what is Jerry’s deduction for 2012.

Question # 7:
Quince Corporation has taxable income of $450,000 for its 2012 calendar tax year. Calculate the corporation's income tax liability for 2012 before tax credits.

Question # 8:
Ulmus Corporation has $1,230,000 in taxable income for 2012. Calculate the corporation's income tax liability for 2012.

Question # 9:
For its 2012 tax year, Ilex Corporation has ordinary income of $240,000, a short-term capital loss of $60,000, and a long-term capital gain of $20,000. Calculate Ilex Corporation's tax liability for 2012.

Question # 10:
Cedar Corporation has an S corporation election in effect. During the 2012 calendar tax year, the corporation had ordinary taxable income of $200,000, and on January 15, 2012, the corporation paid dividends to shareholders in the amount of $120,000.
a) How much taxable income, in total, must the shareholders of the corporation report on their 2012 tax returns?
b) Explain your answer.
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