Individual Taxation Paper 18

1

Chris Bakerís adjusted gross income on her 2012 tax return was $160,000. The amount covered a twelve-month period. For the 2013 tax year, Baker may avoid the penalty for the underpayment of estimated tax if the timely estimated tax payments equal the required annual amount of
I. 90% of the tax on the return for the current year, paid in four equal installments.
II. 100% of prior yearís tax liability, paid in four equal installments.






2

Krete, an unmarried taxpayer, had income exclusively from wages. By December 31, 2012, Kreteís employer had withheld $16,000 in federal income taxes and Krete had made no estimated tax payments. On April 15, 2013, Krete timely filed an extension request to file her individual tax return and paid $300 of additional taxes. Kreteís 2012 income tax liability was $16,500 when she timely filed her return on April 30, 2013, and paid the remaining income tax liability balance. What amount would be subject to the penalty for the underpayment of estimated taxes?






3

John Smith is the executor of his fatherís estate. His father, a calendar-year taxpayer, died on July 15, 2012. As executor of his fatherís estate, John is required to file a final income tax return Form 1040 for his fatherís 2012 tax year. What is the due date of his fatherís 2012 federal income tax return assuming John does not file for an extension?






4

Ray Birch, age sixty, is single with no dependents. Birchís only income is from his occupation as a self-employed plumber. Birch must file a return for 2012 if his net earnings from selfemployment are at least






5

Jackson Corp., a calendar-year corporation, mailed its 2012 tax return to the Internal Revenue Service by certified mail on Friday, March 8, 2013. The return, postmarked March 8, 2013, was delivered to the Internal Revenue Service on March 12, 2013. The statute of limitations on Jacksonís corporate tax return begins on






6

A calendar-year taxpayer files an individual tax return for 2012 on March 20, 2013. The taxpayer neither committed fraud nor omitted amounts in excess of 25% of gross income on the tax return. What is the latest date that the Internal Revenue Service can assess tax and assert a notice of deficiency?






7

If a taxpayer omits from his or her income tax return an amount that exceeds 25% of the gross income reported on the return, the Internal Revenue Service can issue a notice of deficiency within a maximum period of






8

A claim for refund of erroneously paid income taxes, filed by an individual before the statute of limitations expires, must be submitted on Form






9

If an individual paid income tax in 2012 but did not file a 2012 return because his income was insufficient to require the filing of a return, the deadline for filing a refund claim is






10

A married couple filed their joint 2011 calendar-year return on March 15, 2012, and attached a check for the balance of tax due as shown on the return. On June 15, 2013, the couple discovered that they had failed to include $2,000 of home mortgage interest in their itemized deductions. In order for the couple to recover the tax that they would have saved by using the $2,000 deduction, they must file an amended return no later than






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