Question

7) Taxpayer's filing status is Head of Household. For the taxable year, Taxpayer reports the following items of gross income, claims the standard deductions, reports no For AGI deductions, and is not eligible for a QBID or any tax credits. Determine Taxpayer's income tax liability.

• Salary of $68,100

• Qualified dividends of $11,000

A) $7,803

B) $7,343

C) $6,893

D) $5,693

18)   During the tax year, Taxpayer, who is unmarried, earned $70,000 in ordinary income, a net short-term capital loss of $6,500 and a net long-term capital gain of $1,250. Select the option that best describes the impact of the capital gains and losses.

A) Taxpayer must report no offset against ordinary income and a $5,250 short-term capital loss carryforward.

B) Taxpayer must report an offset again ordinary income of $3,000 and a short-term capital loss carryforward of $2,250.

C) Taxpayer must report an offset of $5,250 against ordinary income and no capital loss carryforward.

D) Taxpayer must report an offset again ordinary income of $3,000 and a long-term capital loss carryforward of $2,250.

Answer 1

7

Particulars	Amount	Amount
Gross income:
Salary	$          68,100
Dividends	$          11,000
Other income	$                   -
Gross income		$          79,100
For AGI deductions		$                   -
Adjusted gross income		$          79,100
Less:
Standard deduction	$          18,350
Itemized deduction	$                   -
Higher of the two		$          18,350
Taxable income		$          60,750
Income tax liability		$       5,693.00
[ 1385 + ( 49750 - 13850 ) × 0.12 ]

No tax on dividends.

Answer is 5693

Second:

Option choice B is correct