Question

subject tax accounting:

Demarco and janine Jackson have been married for 20 years and have four children who qualify as their dependents ( Damarcus, Janine, Michael, and Candice). The couple received salary income of $100,000, qualified business income of 10,000, from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $200,000 and they sold it for $250,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $16,500 of itemized deductions, and they had $3,550 withheld from their paychecks for federal taxes. They are also allowed to claim tax credit for each children. Hovewer, because Candice is 18 years of age, the Jackson may claim a child tax credit for other qualifying dependents for Candice.

A) what is the Jackson taxable income, and what is their tax liability or ( refund)

B) complete the first two pages of the jackson's Form 1040 (use the most recient amount form available.

C) What would their taxable income be if their itemized deductions totaled $28,000 instead of $16,500.

D) What would their taxable income be if they had $0 itemized deductions and $6,000 of for AGI deductions.

E) Assume the original facts but now suppose the jacksons also incurred a loss of $5,000 on the sale of some of their investment assets. What effect does the $5,000 loss have on their taxable income.

F) Asummem the original facts but now suppose the Jacksons own investments that appreciated by $10,000 during the year. The Jacksons believe the investments will continue to appreciate, so they did not sell the investments during this year.What is the Jackson,s taxable income.

Answer 1

A.

	Taxable Income
	Gross Income				100000
Less:	Itemwize Deductions			16500
	Standard Deductions			12700
	Higher of SD And Itemwize Deduction				16500
Less:	Personal Expense ( 6*4050 )				24300
	Total Deduction fromAGI				40800
	Taxable Income				59200
	Income Tax liablity				7947.5
	1865 + 15% (59200 - 18650)
	Total Taxes				7947.5
Less:	Child tax Credit (1000 * 4)				4000
	Total tax payable				3947.5
	federeal taxes				6250
	Refund of tax				-2302.5

Thanks