Question

Camille Sikorski was divorced in 2016. She currently provides a home for her 15-year-old daughter, Kaly. Kaly lived in Camille’s home, which she owns, for the entire year, and Camille paid for all the costs of maintaining the home. She received a salary of $52,500 and contributed $4,100 of it to a qualified retirement account (a for AGI deduction). She also received $5,500 of alimony from her former husband.   Finally, Camille paid $2,600 of expenditures that qualified as itemized deductions.

i.               What is Camille’s Gross Income?

ii.              What is Camille’s Adjusted Gross Income?

iii.            Should Camille take itemized deductions or the standard deduction? How much?

iv.             Does Kay qualify as Camille’s dependent? Explain why.

v.              What is Camille’s filing status?

vi.            What is Camille’s allowable deduction from AGI?

vii.           What is Camille’s income tax liability before applying any applicable tax credits?

2.              Assume the original facts but now suppose Camille’s daughter, Kaly, is 25 years old and a full-time student. Kaly’s gross income for the year was $5,200. Kaly provided $3,120 of her own support, and Camille provided $5,200 of support.

i.               Does Kaly qualify as Camille’s dependent? Explain your answer.

ii.              What is Camille’s filing status?

iii.            What is Camille’s allowable deduction from AGI?

iv.             What is Camille’s Income tax liability before applying any applicable tax credits?

Answer 1

Note : The above tax rates apllicable for the year 2016.