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2:27 PM 9 blackboard9.wju.edu Sprint令 イ 45%) 27. Thonas, age 8, received taxable interest of 1.850 and dividends of 2, 550 during the year. He has no other income, and no itenized deductions. Thenà is a dependent of his parents, who have taxable incone of $72,000. If Thomas’ parents do not elect to report his incone on their return, how much of Thosas income will be taxed at his parents” tax rate? a. $o b. $2,300 c. $4,400 d. $400 $3,350 Answer: 28. A taxpayer reported the following items for the year Gain on sale of ABC stock Gambling winnings Gambling losses Door prize $50,000 3,000 5,000 8,000 1,000 What is the taxpayer’s addusted gross incone? a. $57,000 b$54.000 . $51,000 d. $53,000 e- $59,000 Anawer: 29. On January 1, the Reyes loaned theS daughter, Rachael, $25,000 that sh@ could open up bez own business. Ther terns of the loa zequir. Rachael to pay her parents back the $25,000 in three years. No interest is being charged on the loan. The AFR for short, mediun, and long-term loans is 4%, 5.5%, and 6, respectively. The imputed interest on the loan in the cuzzent year is a. $o b.010 c. $i.000 d. $1,375 $1,394 Answer 30· In computing the taxable amount of social security benefits, the first-ier) base anount for a married person who fsles jointly with her spouse la:
Expert Answer
27. According to the provisions of IRS if a child under 18 has unearned income of more than $2,100 then the income above $2,100 will be taxed at parent’s rate. Thomas has total income of $1850 + 2,550 = $4,400. Income above 2,100 is 2,300 (4,400 – 2,100). So $2,300 of the Thomas income will be taxed at his parents’ tax rate.
28. Adjusted Gross Income:
Salary 50,000
Add: Gain on sale of ABC stock 3,000
Add: Gambling winnings 5,000
Add: Door prize 1,000
Gross Income = $59,000
Less: Deduction for AGI = 0
Adjusted gross income = $59,000
