LO 1.5 18. Indicate, in each of the following situations, the number of exemptions the taxpayers
are entitled to claim on their 2010 income tax returns.
Number of Exemptions
a. Donna, a 20-year-old single taxpayer, supports her
mother, who lives in her own home. Her mother has
income of $1,350.
_____________________
b. William, age 43, and Mary, age 45, are married and
support William’s 19-year-old sister, who is not a
student. The sister’s income from a part-time job is
$3,700.
_____________________
c. Devi was divorced in 2010 and receives child
support of $250 per month from her ex-husband for
the support of their 8-year-old son, John, who lives
with her. Devi is 45 and provides more than half of
her son’s support.
_____________________
d. Wendell, an 89-year-old single taxpayer, supports
his son, who is 67 years old and earns no income.
_____________________
e. Wilma, age 65, and Morris, age 66, are married.
They file a joint return.
_____________________
LO 1.3
LO 1.4
19. Jim (age 50) and Martha (age 49) are married with three dependent children. They file a
joint return for 2010. Their income from salaries totals $50,000, and they received
$10,000 in taxable interest, $5,000 in royalties, and $3,000 in other ordinary income.
Jim and Martha’s deductions for adjusted gross income amount to $3,200, and they
have itemized deductions totalling $12,000. Calculate the following amounts:
a. Gross income $ ____________
b. Adjusted gross income $ ____________
c. Itemized deduction or standard deduction am ount $ ____________
d. Number of exemptions $ ____________
e. Taxabl e income $ ____________
f. Income tax liability (Do not consider the alternative
minimum tax covered in Chapter 6 or any credits
including the Making Work Pay credit.)
$ ____________
LO 1.3
LO 1.4
20. Frank, age 35, and Joyce, age 34, are married and file a joint income tax return for
2010. Their salaries for the year total $83,000 and they have taxable interest income
of $4,000. They have no deductions for adjusted gross income. Their itemized deduc-
tions are $12,000. Frank and Joyce do not have any dependents.
a. What is the amount of their adjusted gross income? $ ____________
b. What is their deduction for personal exemptions? $ ____________
c. What is the amount of their taxable income? $ ____________
LO 1.5 21. What is the total dollar amount of personal and dependency exemptions which a mar-
ried couple with one child and $80,000 of adjusted gross income would claim in
2010?____________________________________________________________________
_________________________________________________ ________________________
1-36 Chapter 1
The Individual Income Tax Return
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