Solution Manual for Income Tax Fundamentals 2019 37th Edition by Whittenburg
CHAPTER 1
THE INDIVIDUAL INCOME TAX RETURN
Group 1 – Multiple Choice Questions
1. C (LO 1.1)
2. A (LO 1.1)
3. D (LO 1.2)
4. D (LO 1.2)
5. C (LO 1.3)
6. B (LO 1.3)
7. C $98,000 – $19,000 =
$79,000 (LO 1.4)
9. C (LO 1.5)
10. D (LO 1.5)
11. E (LO 1.6)
12. C (LO 1.6)
13. E (LO 1.6)
14. D (LO 1.7)
15. B (LO 1.7)
16. B (LO 1.7)
17. D (LO 1.8)
18. A (LO 1.8)
19. E $25,000 = $280,000 –
($290,000 – $35,000)
(LO 1.8)
20. B $44,000 = $47,000 –
$3,000 (LO 1.8)
21. B (LO 1.9)
22. A (LO 1.9)
23. D (LO 1.9)
8. C $12,000 standard
deduction (LO 1.4)
Group 2 – Problems
1. a. Raising revenue to operate the government.
b. Furthering economic goals such as reducing unemployment.
c. Furthering social goals such as encouraging contributions to charities. (LO 1.1)
2. a. $36,700 = $41,000 + $700 – $5,000.
b. $24,000, the greater of itemized deductions or the standard deduction of $24,000.
c. $12,700 = $36,700 – $24,000. (LO 1.3)
3. a. $24,000.
b. $12,000, the greater of total itemized deductions or the standard deduction amount.
c. $12,000 = $24,000 – $12,000. (LO 1.3)
4. a. $52,300 = $53,300 + $1,600 +$400 – $3,000 ($7,000 capital loss limited to $3,000)
b. $12,000
c. $0
d. $40,300 = $52,300 – $12,000. (LO 1.3 and 1.8)
5. a. $48,730 = $47,230 + $3,500 – $2,000.
b. $24,000, the greater of itemized deductions or the standard deduction of $24,000.
c. $24,730 = $48,730 – $24,000.
d. $2,586 (Tax Table) (LO 1.3, 1.5, and 1.7)
6. Adjusted gross income
$17,400
Less: Itemized deductions
–2,250
Taxable income
$15,150
Ulysses’ tax liability from the Tax Table is $1,631. Note: because they are married and filing separately
and Ulysses’ spouse Penelope itemizes her deductions, Ulysses must also itemize his deductions, even
though the itemized deductions total less than the standard deduction he would be otherwise entitled to.
(LO 1.3, 1.5, and 1.7)
7. Adjusted gross income ($13,200 + $1,450)
$14,650
Less: Standard deduction
–12,000
Taxable income
$ 2,650
(LO 1.3, 1.5, and 1.7)
(Note: See Chapter 6 for the tax computation for dependent college students under age 24.)
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