Principles Of Taxation For Business And Investment Planning 2020 Edition

23rd Edition

ISBN: 9781259969546

Author: Sally Jones, Shelley C. Rhoades-Catanach, Sandra R Callaghan

Publisher: McGraw-Hill Education

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Textbook Question

Chapter 14, Problem 4IRP

Mr. Tilton is a 20-year-old college student. This year he lived on campus for nine months and in his parents’ home during the summer. His parents paid for all Mr. Tilton’s living expenses, but a scholarship paid for his $22,000 college tuition.

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Chapter 14, Problem 3IRP

Chapter 14, Problem 5IRP

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The Samsons are trying to determine whether they can claim their 22-year-old adopted son, Jason, as a dependent. Jason is currently a full-time student at an out-of-state university. Jason lived in his parents' home for three months of the year, and he was away at school for the rest of the year. He received $9,500 in scholarships this year for his outstanding academic performance and earned $4,800 of income working a part-time job during the year. The Samsons paid a total of $5,000 to support Jason while he was away at college. Jason used the scholarship, the earnings from the part-time job, and the money from the Samsons as his only sources of support. Assume the original facts except that Jason earned $5,500 while working part-time and used this amount for his support. Can the Samsons claim Jason as their dependent?

The Samsons are trying to determine whether they can claim their 22-year-old adopted son, Jason, as a dependent. Jason is currently a full-time student at an out-of-state university. Jason lived in his parents' home for three months of the year, and he was away at school for the rest of the year. He received $9,500 in scholarships this year for his outstanding academic performance and earned $4,800 of income working a part-time job during the year. The Samsons paid a total of $5,000 to support Jason while he was away at college. Jason used the scholarship, the earnings from the part-time job, and the money from the Samsons as his only sources of support. Required: Can the Samsons claim Jason as their dependent? Assume the original facts except that Jason's grandparents, not the Samsons, provided Jason with the $5,000 worth of support. Can the Samsons (Jason's parents) claim Jason as their dependent? Assume the original facts except substitute Jason’s grandparents for his parents.…

Mark's child, Mary, graduated from school 7 months ago. Mark took out an educational loan to pay for mary's school. This year Mark paid a student loan interest of 2100 and has adjusted gross income of $82,000 and files as head of household. Since Mark still claims Mary as a dependent Mark wants to know how much if any, of the student loan interest can he use for an AGI deduction.

Chapter 14 Solutions

Principles Of Taxation For Business And Investment Planning 2020 Edition

Ch. 14 - Prob. 1QPD Ch. 14 - Prob. 2QPD Ch. 14 - Why is the formula for computing individual...Ch. 14 - Discuss possible tax policy reasons why...Ch. 14 - Prob. 5QPD Ch. 14 - Identify the reasons why individual taxpayers...Ch. 14 - Prob. 7QPD Ch. 14 - Individuals who plan to bunch itemized deductions...Ch. 14 - Prob. 9QPD Ch. 14 - Single individuals Sam and Zelle were married this...

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Paul Barrone is a graduate student at State University. His 10-year-old son, Jamie, lives with him, and Paul is Jamies sole support. Pauls wife died in 2018, and Paul has not remarried. Paul received 320,000 of life insurance proceeds (related to his wifes death) in early 2019 and immediately invested the entire amount as shown below. Paul had 42,000 of taxable graduate assistant earnings from State University and received a 10,000 scholarship. He used 8,000 of the scholarship to pay his tuition and fees for the year and 2,000 for Jamies day care. Jamie attended Little Kids Daycare Center, a state-certified child care facility. Paul received a statement related to the Green bonds saying that there was 45 of original issue discount amortization during 2019. Paul maintains the receipts for the sales taxes he paid of 735. Paul lives at 1610 Cherry Lane, Bradenton, FL 34212, and his Social Security number is 111-11-1111. Jamies Social Security number is 123-45-6789. The university withheld 2,000 of Federal income tax from Pauls salary. Paul is not itemizing his deductions. Part 1Tax Computation Compute Pauls lowest tax liability for 2019. Part 2Tax Planning Paul is concerned because the Green bonds were worth only 18,000 at the end of 2019, 5,000 less than he paid for them. He is an inexperienced investor and wants to know if this 5,000 is deductible. The bonds had original issue discount of 2,000 when he purchased them, and he is curious about how that affects his investment in the bonds. The bonds had 20 years left to maturity when he purchased them. Draft a brief letter to Paul explaining how to handle these items. Also prepare a memo for Pauls tax file.

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