Question

Problem 3-44 (LO. 1, 2, 3, 4, 5, 6, 8) Morgan (age 45) is single and provides more than 50% of the support of Rosalyn (a family friend, age 36), Flo (a niece, age 18), and Jerold (a nephew, age 18). Both Rosalyn and Flo live with Morgan, but Jerold (a citizen of France) lives in Canada. Morgan earns a $95,000 salary, contributes $5,000 to a traditional IRA, and receives sales proceeds of $15,000 for an RV that cost $60,000 and was used only for vacations. She incurs $8,200 in itemized deductions. The personal exemption amount for is $4,050. Click here to access the standard deduction table to use if required. a. Who qualifies as a dependent of Morgan for the dependency exemption? All three qualify → b. Morgan's taxable income is $ x for. (Do not round intermediate tax c. Using the Tax Rate Schedules (click here), tax liability for Morgan is s computation but if required, round your final answer to the nearest whole dollar.)

Answer 1

Year	2018
Gross Income	$ 95,000
Less; contribution to IRA	-5000
AGI	$ 90,000
Standard Deduction	-18000
Taxable Income	$ 72,000.00
Tax liability (head of household)	$ 10,388.00
5944+(72000-51800)*22%
Year	2017
Gross Income	$ 95,000
Less; contribution to IRA	-5000
AGI	$ 90,000
Standard Deduction	-9350
Personal Exemption (4050*4)	-16200
Taxable Income	$ 64,450.00
Tax liability (head of household)	$ 10,365.00
6952.5+(25%*(64450-50800))

Note: Personal exemption are eliminated from 2018 to 2025.

For the year 2019, the Standard deduction for Head of Household is $18,350