Acctg 335

Kara is single with no dependents. She has itemized deductions of $5,000 in 2020. What is the total of her "FROM AGI" deductions for 2020?

$12,400

Amy and Ethan are married and file a joint return for 2020. Their taxable income is $78,300. What is the amount of their tax liability (use the tax rate schedules)?

(78300-6162) x .22 + 29,387.5 = 41,735.5

Will and Lyndsey are married with no dependents and file a joint tax return. In 2020, they paid $3,000 in qualified student loan interest in addition to $22,550 in itemized deductions. What is the total of their "FROM AGI" deductions in 2020?

24800

Deductible capital losses can offset capital gains. If the losses exceeds the gains, then a maximum of $@ may be used to offset ordinary income in any one year.

3000

Zack is single and has collected the following information for preparing his 2020 taxes: Gross income $74,000, tax credits $2,500, itemized deductions $9,000, deductions for AGI $5,000, tax prepayments $8,400. Based on this information, Zack's "adjusted gross income" equals $@, and his "taxable income" equals $@

69000, 56600

Which one of the following assets is classified as a capital asset?

A car used personally A house owned and used by a taxpayer Stock held for investment

Which of the following statements is TRUE regarding the individual income tax formula?

A taxpayer may deduct the greater of his standard deduction or his itemized deductions from AGI to arrive at taxable income.

Which of the following examples results in realized income?

A taxpayer sold stock for $1000. She had originally paid $300 for the stock

Which of the following items are deductions FOR adjusted gross income?

Alimony paid for divorces finalized before 1/1/2019 Health insurance for self-employed persons Contributions to (non Roth) qualified retirement accounts Capital losses

Which of the following statements is INCORRECT?

Certain types of realized income items may be deferred to a subsequent year, but no income may be excluded from taxation.

All sources of income are taxable unless specifically excluded through a tax provision. However, @ are NOT permitted unless a specific tax provision allows them.

Deductions

Realized income items that taxpayers permanently omit from income are referred to as @, while items that are taxed in a subsequent year are called @

Exclusions, deferrals

True or False: Commuting costs are classified as itemized deductions for tax purposes.

False

Why are for AGI deductions preferable to from AGI deductions?

For AGI deductions reduce AGI thus increasing deductibility of from AGI deductions based on AGI

Individual Income Tax Formula

Gross income - for AGI deductions = adjusted gross income - from AGI deductions = taxable income

What is meant by the all-inclusive concept when referring to the U.S. tax laws?

Gross income includes all realized income from whatever source derived.

The all-inclusive concept means that @ @ generally includes all realized income from whatever source derived

Gross, income

Which one of the following choices is the definition of realized income?

Income from a transaction with a second party where there is a measurable change in property rights between parties

Tax-exempt, Tax-deferred, Ordinary, Capital

Income realized during the year that is excluded from gross income and never taxed Income realized during the year that is not included in gross income until a later year Income included in gross income in the current year and taxed at the ordinary rates per the tax rate schedules Gains (or losses) on investment or personal use assets that may be taxed at favorable rates

A @-term capital gain is taxed at favorable rates compared to ordinary income, while a @-term capital gain is taxed at ordinary income rates.

Long, short

Which of the following statements is INCORRECT when referring to capital gains and losses?

Losses on personal use assets are fully deductible against ordinary income

Which filing status is allowed the highest standard deduction amount?

Married filing jointly

Taxpayers pay the same @ tax rates on qualified dividends and long term capital gains, but the amount of the dividends and long term capital are not @ together.

Preferential, preferred, or lower Netted or net

Dividends from corporations that meet certain requirements may be taxed at a favorable rate. These dividends are referred to as:

Qualified dividends

Which one of the following items is NOT a deduction FOR AGI?

Real estate taxes on personal residence

Yolanda is your client. With her current level of taxable income, she is paying tax at a 24% marginal rate. She received $2,000 in qualified dividends this year. What rate of tax do you expect that Yolanda will pay on her dividends?

Yolanda's 24% marginal tax rate means her taxable income is more than $85,525 but less than $163,300, and for all values in that range, the long term capital gains rate applied to qualified dividends is 15%.

Deductions @ (for/from) AGI cause a reduction in AGI, which increases the deductibility of @ (for/from) AGI deductions subject to AGI limitations.

for from

Some tax deductions are subtracted @ AGI and some are subtracted @ AGI

for, from