Concept explainers
a.
Identify and comment on the availability of head-of-household filing status for the year 2019 for situation A.
b.
Identify and comment on the availability of head-of-household filing status for the year 2019 for situation B.
c.
Identify and comment on the availability of head-of-household filing status for the year 2019 for situation C.
d.
Identify and comment on the availability of head-of-household filing status for the year 2019 for situation D.
e.
Identify and comment on the availability of head-of-household filing status for the year 2019 for situation E.
f.
Identify and comment on the availability of head-of-household filing status for the year 2019 for situation F.
g.
Identify and comment on the availability of head-of-household filing status for the year 2019 for situation G.
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Individual Income Taxes
- Shanna, a calendar year and cash basis taxpayer, rents property to be used in her business from Janice. As part of the rental agreement, Shanna pays 8,400 rent on April 1, 2019, for the 12 months ending March 31, 2020. a. How much is Shannas deduction for rent expense in 2019? b. Assume the same facts, except that the 8,400 is for 24 months rent ending March 31, 2021. How much is Shannas deduction for rent expense in 2019?arrow_forwardWhich of the following is not a deduction for AGI? a. Alimony paid for a divorce finalized in 2018. b. Business rent on a self-employed business. c. Property taxes paid on your primary residence. d. One half of self-employment tax.arrow_forwardWhich of the following would preclude a taxpayer from deducting student loan interest expense? a. The total amount paid is 1,000. b. The taxpayer is single with AGI of 55,000. c. The taxpayer is married filing jointly with AGI of 120,000. d. The taxpayer is taken as a dependent of another taxpayer.arrow_forward
- Which of the following is a deduction for AGI? a. Charitable contributions. b. Alimony paid for a divorce finalized in 2015. c. Tax preparation fees. d. Mortgage interest paid on your primary residence.arrow_forwardElaine Case (single with no dependents) has the following transactions in 2019: What is Elaines net capital gain or loss? Draft a letter to Elaine describing how the net capital gain or loss will be treated on her tax return. Assume that Elaines income from other sources puts her in the 37% bracket. Elaines address is 300 Ireland Avenue, Shepherdstown, WV 25443.arrow_forwardKaren, 28 years old and a single taxpayer, has a salary of $33,000 and rental income of $33,000 for the 2019 calendar tax year. Karen is covered by a pension through her employer. What is the maximum amount that Karen may deduct for contributions to her IRA for 2019? $__________________________ If Karen is a calendar year taxpayer and files her tax return on August 15, what is the last date on which she can make her contribution to the IRA and deduct it for 2019? $__________________________arrow_forward
- Joy incurs the following expenses in her business. When can she deduct the expenses if she uses the accrual method of accounting? the cash method? a. Joy rents an office building for 750 a month. Because of a cash flow problem, she is unable to pay the rent for November and December 2019. On January 5, 2019, Joy pays the 2,250 rent due for November, December, and January. b. Joy borrows 60,000 on a 1-year note on October 1, 2019. To get the loan, she has to prepay 6,200 in interest. c. Joy owes employees accrued wages totaling 20,000 as of December 31, 2019. The accrued wages are paid in the regular payroll on January 5, 2020. d. Joy purchases 2,400 worth of supplies from a local vendor. The supplies are delivered on January 29, 2019. They are fully used up on December 30, 2019. Because of unusual circumstances, a bill for the supplies arrives from the vendor on January 10, 2020, and is promptly paid. e. While at a trade convention, Joy purchases some pens and paperweights to send out as holiday gifts to her clients. She charges the 700 cost to her credit card in December 2019. She pays the credit card bill in January 2020.arrow_forwardIn 2019, Lou has a salary of $53,300 from her job. She also has interest income of $1,600 and dividend income of $ 400. Lou is single and has no dependents. During the year, Lou sold silver coins held as an investment for a $7,000 loss. Calculate the following amounts for Lou: Adjusted gross income $ ____________________ Standard deduction $ ____________________ Taxable income $ ____________________arrow_forward
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT