Question

15. Tony is single and age 68. He had the following transactions in 2019: Salary Interest Income from First Bank Interest Income from New York City Bonds Bank loan (proceeds used to buy personal auto) Alimony paid (divorce was finalized in 2010) Loss on sale of stock (held for 2 years) Child support paid Gift from aunt Deductible Itemized Deductions $50,000 $ 1,200 1,000 10,000 12,000 ( 8,000) 6,000 20,000 10,000 Tony's taxable income is: a. $17,350 b. $19,000 c. $22,350 d. $24,000 e. $29,000 16. Tiffany and Lou divorced in 2018. The divorce agreement awards custody of their 3 children (all under age 17) to Tiffany. The agreement does not state who may claim the children as dependents for purposes of claiming the $2,000 child tax credit. Who can claim the child tax credit in 2019 if Lou furnished more than half of the children's support? a. Only Lou b. Only Tiffany C. Lou, but only if Tiffany signs a waiver d. Tiffany, but only if Lou signs a waiver e. Neither may claim the child tax credit because the agreement is silent

Answer 1

SOLUTION:-

Answer is highlighted in yellow: Both are individual questions: Solution: $ 22,350 Answer:15) Explanation: $ 50,000 $ 1,200 $ - Salary Interest income from bank Interest income from bonds (exempt) Bank loan Alimony paid Loss on sale of stock (2 yrs) upto $3,000 allowed Child support paid (not deductible) Gift from aunt (exempt) AGI Less: Greater of standard or itemized deduction (12200+1650) Tony's taxable Income $-12,000 $ -3,000 $ - $ - $ 36,200 $-13,850 $ 22,350 Answer:16) c. Lou, but only if Tiffany signs a waiver Because, child support is not a base of claiming CTC in case of divorce. It is only the discreation of Tiffany (the custodial) if Tiff sign a waiver and allow Lou to claim. Otherwise, Tiffany can claim Child tax credit.

Thank you , if any queries please leave your valuable comment on comment box..........