Taxation in the United States and Gross Income

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31.
Tom and Linda are married taxpayers who file a joint return. They have itemized deductions of $12,250 and four exemptions. Assuming an adjusted gross income of $40,000, what is their taxable income for 2012?

Adjusted Gross Income40,000
Itemized Deduction -12,250
(higher than 11,900,married filing jointly)
Personal Exemptions - 15,200 (3,800 x 4)
Taxable Income12,550

32.
Compute Marie's taxable income for 2012, assuming she is single and claims two dependent children. Her adjusted gross income is $70,000, and she has itemized deductions of $9,000.

Adjusted Gross Income70,000
Itemized deduction -9,000
(higher than 8,700, head of household)
Personal Exemptions -11,400(3,800x3)
Taxable Income49,600

36.
Compute Stanley's taxable income for 2012, assuming he has $1,000 in wages from working in a grocery store and $2,000 in interest income from some bonds he owns. Stanley, age 16, is claimed as a dependent on his parents' return.

Earned Income1,000
Unearned Income2,000
Gross Income 1,000+2,000 3,000
Deduction 1,300
(higher of 950 or 1,000+300)
Taxable Income1,700

Unearned Income2,000
Deduction 1,900
(950+950)
Total 100

Taxable at parent’s rate 100
Taxable at own rate1,600

55.
Mr. Z, a non-dealer, sold assets on an installment plan. Determine Mr. Z's gross income for 2012. Relevant data include:

YearInstallmentGross 2012
SalesProfitCollections

2010$200,000$50,000$ 25,000
2011 300,000 81,000 80,000
2012 400,000 96,000 125,000

Gross Profit %= Gross Profit/ Sales price
2012 Income
201050,000/200,000= 25%25,000x25%=6,250
201181,000/300,000= 27%80,000x27%=21,600
201296,000/400,000= 24%125,000x24%= 30,000

Gross Income 2012=6,250+21,600+30,000= 57,850

69.
Comprehensive Problem. Bill is a cash-basis, calendar-year taxpayer. Which...
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