56. 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 $3,050
withheld from their paychecks for federal taxes. They are also
allowed to claim a child tax credit for each of their children.
However, because Candice is 18 years of age, the Jacksons may only
claim the child tax credit for other qualifying dependents for
Candice.
a. What is the Jacksons’ taxable income and what is their tax
liability or (refund)?
b. Complete the Jacksons’ Form 1040, pages 1, 2, and Schedule 1
(use most recent 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. Assume 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
Jacksons’ taxable income?
The working of tax liability in all cases is shown at the last page.
Child tax credit is $2000 each child under age 17
=$2000*3 = $6000
( Candince is 18years of age hence excluded )
tax liability is computed as per tax rate 2020
56. Demarco and Janine Jackson have been married for 20 years and have four children who...
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 and 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...
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...
s. 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 recent form available couple received salary income of $100,000, qualified business income of S10,000 from an investment in a partnership, and they sold their home this year. They ini tially 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...
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...
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...
Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine Jr., Michael, and Candice). The couple received salary income of $100,000 and 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...
Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine Jr., Michael, and Candice). The couple received salary income of $100,000 and 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...
Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents (Damarcus, Janine Jr., Michael, and Candice). The couple received salary income of $125,000 and qualified business income of $20,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $250,000 and they sold it for $300,000. The gain on the sale qualified for the exclusion from the sale of...
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 $130,000, qualified business income of $20,500 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $252,500 and they sold it for $302,500. The gain on the sale qualified for the exclusion from the sale of a principal...
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 and 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...