IGNOU MSCCFT and PGDCFT Exam Question Pattern: MCFT003 Counselling and Family...
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1. CHAPTER 1 The Individual Income Tax Return Income Tax Fundamentals 2011 Gerald E. Whittenburg Martha Altus-Buller 2011 Cengage Learning
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13. Solution 2011 Cengage Learning Gross income $40,000 Adjusted gross income 37,500 Greater of the standard deduction or itemized deductions ___________ Exemptions ___________ Taxable income ___________ AGI = $40,000 – 2,500
14. Solution 2011 Cengage Learning Gross income $40,000 Adjusted gross income 37,500 Greater of the standard deduction or itemized deductions 5,700 Exemptions Taxable income ___________ The standard deduction of $5,700 exceeds itemized deductions of $3,000
15. Solution 2011 Cengage Learning Gross income $40,000 Adjusted gross income 37,500 Greater of the standard deduction or itemized deductions 5,700 Exemptions 3,650 Taxable income $28,150
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34. Standard Deduction - Dependents 2011 Cengage Learning The special rule for standard deduction for dependents is “Deduction = Greater of $950 or earned income + $300, but only up to basic standard deduction” Example 1: Jaime is 23 and a full time student and her parents claim her as a dependent; she earned $2,000 in 2010, how much is taxable income? $2,000 earned income ( 2,000 ) standard deduction $0 taxable income Example 2: Tia is 18 - has dividend income of $1,500 (dividends are considered unearned income), how much is taxable income? $1,500 dividend income ( 950 ) standard deduction $ 550 taxable income
35. Basic Gain & Loss Model 2011 Cengage Learning Amount Realized* - Adjusted Basis** Realized Gain/Loss * Sales Price - Sales Expenses ** Cost - Accumulated Depreciation Note: Most realized gains/losses are also recognized (i.e. – included in taxpayer’s income )
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38. Calculating Gain/Loss 2011 Cengage Learning Facts: Noah purchased Sony AAA bonds in 2006 for $47,600. In 2010, he sold the bonds for $51,500, paying commission of $515. What is his: Amount realized ___________ Adjusted basis ___________ Realized gain/loss ___________ Recognized gain/loss ___________ Type of gain/loss ___________
39. Solution 2011 Cengage Learning Amount realized * $50,985 Adjusted basis 47,600 Realized gain/loss 3,385 Recognized gain/loss 3,385 Type of gain/loss Long term capital gain *Amount realized = $51,500 – 515
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