Indicate for Each of the Following the Most Favorable Filing
Indicate for each of the following the most favorable filing status for the 2013 tax year.
a.Kenny died on March 2,2012.Marge,his wife,and Bart,their son,survive.Marge filed a joint return in 2012.Bart,age 18 in 2013,is a part-time college student and continues to live at home with his mother.He works part-time,earning $6,200.What is Marge's filing status in 2013?
b.Alan Spaulding is single and provides over 50% support of his niece Alicia who lives with him all year long.Alan maintains the household and claims Alicia as a dependent.Alicia makes $3,600 at a part-time job.She is a full-time student,age 18.What is Alan's filing status?
c.Lily,who was divorced on July 27,2012,provides 100% of the support for her parents who live in a nursing home in Kansas and have no income.What is Lily's filing status?
d.Holly was abandoned by her husband Fletcher in September of the current year.She has not seen or communicated with him since then.What is Holly's filing status?
e.Rick,whose wife died in December 2010,filed a joint tax return for 2010.He did not remarry,but has continued to maintain his home in which his two dependent children live.What is Rick's filing status for 2013?
Gina Lewis,age 12,is claimed as a dependent on her parent's return.She is their only child.During 2013,she earned $2,300 from a summer job.She also earned interest of $2,750.Her parents' marginal tax rate is 28 percent.
a.Compute the amount of Gina's tax liability for 2013.
b.Can Gina's parents take a child tax credit for her?
Paige is starting Paige's Poodle Parlor and is considering alternative organizational forms.She anticipates the business will earn $100,000 from operating before compensating her for her services and before charitable contributions.Page,who is single,has $3,000 of income from other sources and other itemized deductions of $12,000.Her compensation for services will be $50,000.Charitable contributions to be made by the business are expected to be $5,000.Other distributions (dividends)to her from the business are expected to be $14,000.
Required: Compare her current income tax assuming she operates the business as a proprietorship,an S corporation,and a C corporation.Ignore payroll and other taxes.
Steve and Jennifer are in the 33% tax bracket for ordinary income and the 15% bracket for capital gains.They have owned several blocks of stock for many years.They are considering the sale of two blocks of stock.The sale of one would produce a gain of $12,000 while the sale of the other would produce a loss of $18,000.For purposes of this problem,ignore personal exemptions,itemized deductions,phase-outs and additional investment taxes.They have no other gains and losses this year.
a.How much tax will they save if they sell the block of stock that produces a loss?
b.How much additional tax will they pay if they sell the block of stock that produces a gain?
c.What will be the impact on their taxes if they sell both blocks of stock?