Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Jasmine, Michael, and Candice). The Jacksons file a joint tax return. The couple received salary income of $101,500 and qualified business income of $13,500 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $217,500 and they sold it for $267,500. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $17,200 of itemized deductions, and they had $4,000 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice was 18 years of age at year end, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.) Comprehensive Problem 4-57 Part-a (Algo) a. What is the Jacksons taxable income, and what is their tax liability or (refund)? Note: Do not round intermediate calculations. (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Itemized deductions Description $ $ Amount 115,000 20 115,000
Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Jasmine, Michael, and Candice). The Jacksons file a joint tax return. The couple received salary income of $101,500 and qualified business income of $13,500 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $217,500 and they sold it for $267,500. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $17,200 of itemized deductions, and they had $4,000 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice was 18 years of age at year end, the Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.) Comprehensive Problem 4-57 Part-a (Algo) a. What is the Jacksons taxable income, and what is their tax liability or (refund)? Note: Do not round intermediate calculations. (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Itemized deductions Description $ $ Amount 115,000 20 115,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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4
Transcribed Image Text:Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents
(Damarcus, Jasmine, Michael, and Candice). The Jacksons file a joint tax return. The couple received salary income of
$101,500 and qualified business income of $13,500 from an investment in a partnership, and they sold their home this
year. They initially purchased the home three years ago for $217,500 and they sold it for $267,500. The gain on the sale
qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $17,200 of itemized deductions,
and they had $4,000 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for
each of their children. However, because Candice was 18 years of age at year end, the Jacksons may claim a child tax
credit for other qualifying dependents for Candice. (Use the tax rate schedules.)
Comprehensive Problem 4-57 Part-a (Algo)
a. What is the Jacksons taxable income, and what is their tax liability or (refund)?
Note: Do not round intermediate calculations.
(1) Gross income
(2) For AGI deductions
(3) Adjusted gross income
(4) Standard deduction
(5) Itemized deductions
Description
$
$
Amount
115,000
0
115,000
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