39. LO.5 In each of the following independent situations, determine Winston’s filing status.
Winston is not married.
a. Winston lives alone, but he maintains a household in which his parents live. The mother qualifies as Winston’s dependent, but the father does not.
b. Winston lives alone, but he maintains a household in which his married daughter,
Karin, lives. Both Karin and her husband (Winston’s son-in-law) qualify as Winston’s dependents.
c. Winston maintains a household in which he and a family friend, Ward, live. Ward qualifies as Winston’s dependent.
d. Winston maintains a household in which he and his mother-in-law live. Winston’s wife died last year.
e. Same as (d), except that Winston’s wife disappeared (i.e., she did not die) two years ago.
40. LO.4, 5 Christopher died in 2011 and is survived by his wife, Chloe, and their 18-yearold son, Dylan. Chloe is the executor of Christopher’s estate and maintains the household in which she and Dylan live. All of their support is furnished by Chloe. Dylan saves his earnings. Dylan reports the following information.
Year Earnings Student?
2011 $5,000 Yes
2012 7,000 No
2013 6,000 Yes
What is Chloe’s Federal income tax filing status for:
41. LO.3, 4, 5 Nadia died in 2012 and is survived by her husband, Jerold (age 44); her married son, Travis (age 22); and her daughter-in-law, Macy (age 18). Jerold is the executor of his wife’s estate. He maintains the household where he, Travis, and Macy live, and Jerold furnished all of their support. During 2012 and 2013, Travis is a full-time student, while Macy earns $7,000 each year from a part-time job. Travis and Macy do not file jointly during either year.
What is Jerold’s Federal income tax filing status for 2012 and 2013 if all parties reside in:
a. Idaho (a community property state)?
b. Kansas (a common law state)?
42. LO.4, 9 Walter and Nancy provide 60% of the support of their daughter Irene (age
18) and son-in-law John (age 22). John is a full-time student at a local university, while
Irene holds various part-time jobs from which she earns $11,000.
Walter and Nancy engage you to prepare their tax return for 2013. During a meeting with them in late March 2014, you learn that John and Irene have filed a joint return.
What tax advice would you give based on the following assumptions?
a. All parties live in Louisiana (a community property state).
b. All parties live in New Jersey (a common law state).
43. LO.1, 2, 3, 4, 5, 6 Using the Tax Rate Schedules, compute the 2013 tax liability for
Charlotte. Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children, who live with her. Charlotte also maintains the household in which her parents live, and she furnished 60% of their support. Besides interest on City of
Miami bonds in the amount of $6,500, Charlotte’s father received $2,400 from a parttime job. Charlotte earns an $80,000 salary, a short-term capital loss of $2,000, and a cash prize of $4,000 at a church raffle. Charlotte reports itemized deductions of $10,500.
44. LO.1, 2, 3, 4, 5, 6, 8 Use the Tax Rate Schedules to compute Morgan’s 2013
Federal income tax liability. Morgan (age 45) is single and provides more than 50% of the support of Rosalyn (a family friend), Flo (a niece, age 18), and Jerold (a nephew, age 18). Both Rosalyn and Flo live with Morgan, but Jerold (a citizen of France) lives in
Canada. Morgan earns a $95,000 salary, contributes $5,000 to a traditional IRA, and receives sales proceeds of $15,000 for an RV that cost $60,000 and was used only for vacations. She has $8,200 in itemized deductions.
45. LO.5 Which of the following individuals are required to file a 2013 Federal income tax return? Should any of these individuals file a return even if filing is not required? Why or why not?
a. Patricia, age 19, is a self-employed single individual with gross income of $5,200 from an unincorporated business. Business expenses amounted to $4,900.
b. Mike is single and is 67 years old. His gross income from wages was $10,800.
c. Ronald is a dependent child under age 19 who received $6,250 in wages from a parttime job.
d. Sam is married and files a joint return with his spouse, Lana. Both Sam and Lana are
67 years old. Their combined gross income was $22,750.
e. Quinn, age 20, is a full-time college student who is claimed as a dependent by his parents. For 2013, Quinn reports taxable interest and dividends of $2,500.
46. LO.5, 6, 9 Roy and Brandi are engaged and plan to get married. Roy is a full-time student and earns $9,000 from a part-time job. With this income, student loans, savings, and nontaxable scholarships, he is self-supporting. For the year, Brandi is employed and reports $61,000 wages. How much 2012 Federal income tax, if any, can Brandi save if she and Roy marry in 2013 and file a joint return?
47. LO.1, 3, 6, 7 Taylor, age 18, is claimed as a dependent by her parents. For 2013, she records the following income: $4,000 wages from a summer job, $1,800 interest from a money market account, and $2,000 interest from City of Boston bonds.
a. What is Taylor’s taxable income?
b. What is Taylor’s Federal income tax? Her parents file a joint return and report taxable income of $130,000 (no dividends or capital gains).