Which of the following is not a miscellaneous itemized
(d) The requirement is to determine which item is not a
miscellaneous itemized deduction. A legal fee for tax advice related
to a divorce, IRA trustee’s fees that are separately billed and
paid, and an appraisal fee for valuing a charitable contribution
qualify as miscellaneous itemized deductions subject to the 2% of
AGI floor. On the other hand, the check writing fees for a personal
checking account are a personal expense and not deductible.
Magda Micale, a public school teacher with adjusted gross
income of $10,000, paid the following items in 2012 for which
she received no reimbursement:
Initiation fee for membership in teachers’ union $100
Dues to teachers’ union 180
Voluntary unemployment benefit fund contributions
to union-established fund 72
How much can Magda claim in 2012 as allowable miscellaneous
deductions on Schedule A of Form 1040?
(a) The requirement is to determine the amount that
can be claimed as miscellaneous itemized deductions. Both the
initiation fee and the union dues are fully deductible. The voluntary
benefit fund contribution is not deductible. Miscellaneous
itemized deductions are generally deductible only to the extent
they exceed 2% of AGI. In this case the deductible amount is $80
[$280 – (.02 × $10,000)].
Which one of the following is not included in determining
the total support of a dependent?
(d) The requirement is to determine which item is not
included in determining the total support of a dependent. Support
includes food, clothing, FMV of lodging, medical, recreational,
educational, and certain capital expenditures made on
behalf of a dependent. Excluded from support is life insurance
premiums, funeral expenses, nontaxable scholarships, and income
and social security taxes paid from a dependent’s own income.
In 2012, Smith, a divorced person, provided over one-half
the support for his widowed mother, Ruth, and his son, Clay,
both of whom are US citizens. During 2012, Ruth did not live
with Smith. She received $9,000 in social security benefits. Clay,
a full-time graduate student, and his wife lived with Smith. Clay
had no income but filed a joint return for 2012, owing an additional
$500 in taxes on his wife’s income. How many exemptions
was Smith entitled to claim on his 2012 tax return?
(c) The requirement is to determine the number of
exemptions that Smith was entitled to claim on his 2012 tax return.
Smith will be allowed one exemption for himself and one
exemption for his dependent mother. Smith is entitled to an
exemption for his mother because he provided over half of her
support, and her gross income ($0) was less than $3,800. Note
that her $9,000 of social security benefits is excluded from her
gross income, and that she did not have to live with Smith because
she is related to him. No exemption is available to Smith
for his son, Clay, because his son filed a joint return on which
there was a tax liability.
Jim and Kay Ross contributed to the support of their two
children, Dale and Kim, and Jim’s widowed parent, Grant. For
2012, Dale, a twenty-year-old full-time college student, earned
$4,500 from a part-time job. Kim, a twenty-three-year-old bank
teller, earned $18,000. Grant received $5,000 in dividend income
and $4,000 in nontaxable social security benefits. Grant,
Dale, and Kim are US citizens and were over one-half supported by Jim and Kay. How many exemptions can Jim and Kay claim on their 2012 joint income tax return?
(b) The requirement is to determine how many exemptions
Jim and Kay can claim on their 2012 joint income tax return.
Jim and Kay are entitled to one personal exemption each
on their joint return. They also are entitled to one exemption for
their son, Dale, since he is a qualifying child (i.e., Dale did not
provide more than half of his own support, and Dale is a full-time
student under age twenty-four). However, no dependency exemptions
are available for Kim and Grant. Kim is not a qualifying
child because she is at least age 19 and not a full-time student,
and she is not a qualifying relative because her gross income was
at least $3,800. Similarly, Grant is not a qualifying relative because
his gross income was at least $3,800.
Joe and Barb are married, but Barb refuses to sign a 2012
joint return. On Joe’s separate 2012 return, an exemption may be
claimed for Barb if
(d) The requirement is to determine the requirements
which must be satisfied in order for Joe to claim an exemption for
his spouse on Joe’s separate return for 2012. An exemption can
be claimed for Joe’s spouse on Joe’s separate 2012 return only if
the spouse had no gross income and was not claimed as another
person’s dependent in 2012.
Al and Mary Lew are married and filed a joint 2012 income
tax return in which they validly claimed the $3,800 personal exemption
for their dependent seventeen-year-old daughter, Doris.
Since Doris earned $5,400 in 2012 from a part-time job at the
college she attended full-time, Doris was also required to file a
2012 income tax return. What amount was Doris entitled to
claim as a personal exemption in her 2012 individual income tax
(a) The requirement is to determine the amount of
personal exemption on a dependent’s tax return. No personal
exemption is allowed on an individual’s tax return if the individual
can be claimed as a dependency exemption by another taxpayer.
During 2012 Robert Moore, who is fifty years old and unmarried,
maintained his home in which he and his widower father,
age seventy-five, resided. His father had $4,700 interest
income from a savings account and also received $2,400 from
social security during 2012. Robert provided 60% of his father’s
total support for 2012. What is Robert’s filing status for 2012,
and how many exemptions should he claim on his tax return?
(d) The requirement is to determine Robert’s filing
status and the number of exemptions that he should claim. Robert’s
father does not qualify as Robert’s dependent because his
father’s gross income (interest income of $4,700) was not less
than $3,800. Social security is not included in the gross income
test. Since his father does not qualify as his dependent, Robert
does not qualify for head-of-household filing status. Thus, Robert
will file as single with one exemption.
John and Mary Arnold are a childless married couple who
lived apart (alone in homes maintained by each) the entire year
2012. On December 31, 2012, they were legally separated under
a decree of separate maintenance. Which of the following is the
only filing status choice available to them when filing for 2012?
(a) The requirement is to determine the filing status of
the Arnolds. Since they were legally separated under a decree of
separate maintenance on the last day of the taxable year and do
not qualify for head-of-household status, they must each file as
Albert and Lois Stoner, age sixty-six and sixty-four, respectively,
filed a joint tax return for 2012. They provided all of the
support for their blind nineteen-year-old son, who has no gross
income. Their twenty-three-year-old daughter, a full-time student
until her graduation on June 14, 2012, earned $4,900, which
was 40% of her total support during 2012. Her parents provided
the remaining support. The Stoners also provided the total support
of Lois’ father, who is a citizen and lifelong resident of Peru.
How many exemptions can the Stoners claim on their 2012 income
(a) Mr. and Mrs. Stoner are entitled to one exemption
each. They are entitled to one exemption for their daughter since
she is a qualifying child (i.e., she did not provide more than half
of her own support, and she is a full-time student under age
twenty-four). An exemption can be claimed for their son because
he is a qualifying relative (i.e., they provided more than half of his
support, and his gross income was less than $3,800). No exemption
is allowable for Mrs. Stoner’s father since he was neither a
US citizen nor resident of the US, Canada, or Mexico. There is
no additional exemption for being age sixty-five or older.