Required information [The following information applies to the questions displayed below.] Demarco and Janine Jackson have...
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Required information [The following information applies to the questions displayed below.] Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine, Michael, and Candice). The couple received salary income of $175,000 and qualified business income of $17,500 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $237,500 and they sold it for $287,500. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $18,000 of itemized deductions, and they had $4,300 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice is 18 years of age, the Jacksons may only claim the child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.) c. What would their taxable income be if their itemized deductions totaled $29,500 instead of $18,000? Description Amount (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Itemized deductions (6) (7) Deduction for qualified business income (8) Total deductions from AGI Taxable income e. Assume the original facts but now suppose the Jacksons also incurred a loss of $5,750 on the sale of some of their investment assets. What effect does the $5,750 loss have on their taxable income? f. Assume the original facts but now suppose the Jacksons own investments that appreciated by $10,000 during the year. The Jacksons believe the investments will continue to appreciate, so they did not sell the investments during this year. What is the Jacksons' taxable income? Taxable income 2019 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: $ 0 $ 9,700 The tax is: $ 9,700 $ 39,475 $ 84,200 $4,543 plus 22% of the excess over $39,475 10% of taxable income $970 plus 12% of the excess over $9,700 $ 39,475 $ 84,200 $160,725 $14,382.50 plus 24% of the excess over $84,200 $160,725 $204,100 $32,748.50 plus 32% of the excess over $160,725 $204,100 $510,300 $46,628.50 plus 35% of the excess over $204,100 $510,300 $153,798.50 plus 37% of the excess over $510,300 Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: $ 0 $ 19,400 The tax is: $ 19,400 10% of taxable income $ 78,950 $1,940 plus 12% of the excess over $19,400 $168,400 $9,086 plus 22% of the excess over $78,950 $ 78,950 $168,400 $321,450 $28,765 plus 24% of the excess over $168,400 $321,450 $408,200 S65,497 plus 32% of the excess over $321,450 $408,200 $612,350 $93,257 plus 35% of the excess over $408,200 $612,350 $164,709.50 plus 37% of the excess over $612,350 Schedule Z-Head of Household If taxable income is over: But not over: The tax is: $ 0 10% of taxable income $1,385 plus 12% of the excess over $13,850 $ 13,850 $ 13,850 $ 52,850 $ 84,200 $ 52,850 $ 84,200 $160,700 S12,962 plus 24% of the excess over $84,200 $6,065 plus 22% of the excess over $52,850 $160,700 $204,100 $31,322 plus 32% of the excess over $160,700 $204,100 $510,300 $45,210 plus 35% of the excess over $204,100 $510,300 $152,380 plus 37% of the excess over $510,300 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: $ 0 $ 9,700 $ 39,475 $ 84,200 The tax is: $ 9,700 10% of taxable income $ 39,475 $ 84,200 $970 plus 12% of the excess over $9,700 $4,543 plus 22% of the excess over $39,475 $160,725 $14,382.50 plus 24% of the excess over $84,200 $160,725 $204,100 $32,748.50 plus 32% of the excess over $160,725 $204,100 $306,175 $46,628.50 plus 35% of the excess over $204,100 $306,175 S82,354.75 plus 37% of the excess over $306,175 Required information [The following information applies to the questions displayed below.] Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine, Michael, and Candice). The couple received salary income of $175,000 and qualified business income of $17,500 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $237,500 and they sold it for $287,500. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $18,000 of itemized deductions, and they had $4,300 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice is 18 years of age, the Jacksons may only claim the child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.) c. What would their taxable income be if their itemized deductions totaled $29,500 instead of $18,000? Description Amount (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Itemized deductions (6) (7) Deduction for qualified business income (8) Total deductions from AGI Taxable income e. Assume the original facts but now suppose the Jacksons also incurred a loss of $5,750 on the sale of some of their investment assets. What effect does the $5,750 loss have on their taxable income? f. Assume the original facts but now suppose the Jacksons own investments that appreciated by $10,000 during the year. The Jacksons believe the investments will continue to appreciate, so they did not sell the investments during this year. What is the Jacksons' taxable income? Taxable income 2019 Tax Rate Schedules Individuals Schedule X-Single If taxable income is over: But not over: $ 0 $ 9,700 The tax is: $ 9,700 $ 39,475 $ 84,200 $4,543 plus 22% of the excess over $39,475 10% of taxable income $970 plus 12% of the excess over $9,700 $ 39,475 $ 84,200 $160,725 $14,382.50 plus 24% of the excess over $84,200 $160,725 $204,100 $32,748.50 plus 32% of the excess over $160,725 $204,100 $510,300 $46,628.50 plus 35% of the excess over $204,100 $510,300 $153,798.50 plus 37% of the excess over $510,300 Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is over: But not over: $ 0 $ 19,400 The tax is: $ 19,400 10% of taxable income $ 78,950 $1,940 plus 12% of the excess over $19,400 $168,400 $9,086 plus 22% of the excess over $78,950 $ 78,950 $168,400 $321,450 $28,765 plus 24% of the excess over $168,400 $321,450 $408,200 S65,497 plus 32% of the excess over $321,450 $408,200 $612,350 $93,257 plus 35% of the excess over $408,200 $612,350 $164,709.50 plus 37% of the excess over $612,350 Schedule Z-Head of Household If taxable income is over: But not over: The tax is: $ 0 10% of taxable income $1,385 plus 12% of the excess over $13,850 $ 13,850 $ 13,850 $ 52,850 $ 84,200 $ 52,850 $ 84,200 $160,700 S12,962 plus 24% of the excess over $84,200 $6,065 plus 22% of the excess over $52,850 $160,700 $204,100 $31,322 plus 32% of the excess over $160,700 $204,100 $510,300 $45,210 plus 35% of the excess over $204,100 $510,300 $152,380 plus 37% of the excess over $510,300 Schedule Y-2-Married Filing Separately If taxable income is over: But not over: $ 0 $ 9,700 $ 39,475 $ 84,200 The tax is: $ 9,700 10% of taxable income $ 39,475 $ 84,200 $970 plus 12% of the excess over $9,700 $4,543 plus 22% of the excess over $39,475 $160,725 $14,382.50 plus 24% of the excess over $84,200 $160,725 $204,100 $32,748.50 plus 32% of the excess over $160,725 $204,100 $306,175 $46,628.50 plus 35% of the excess over $204,100 $306,175 S82,354.75 plus 37% of the excess over $306,175
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Essentials of Federal Taxation 2019
ISBN: 9781260190045
10th edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
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