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8 Cards in this Set
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1) Joan Jefferson made giftsof $100,000 this year, as follows: $30,000 to her daughter,Eva;$ 8,000 to her friend,Harold; and$62,000 to her alma mater(The University of Exes) a) What is the amount of Joan'staxable gifts for the year? |
$30,000 - $14,000(exclusion) = $16,000 8,000 - 8,000 (exclusion) = 0 62,000 - 62,000 (unlimited charitable 0 contribution) $16,000 unless it is the first once in a lifetime 5,430,000 exclusion |
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2)Jenny Jantzen (age 83)died and left her entire estate (valued at $16 million) to her husband, Don(age 26). Assuming that Jenny's funeraland administrative expenses total $100,000 and her pre-death debts total$600,000, what is the amount ofJenny's taxable estate? |
The amount of the taxableestate is $0 because of the unlimited marital deduction. Also, Jenny's estate could subtract the$100,000 of administrative expenses and $600,000 of debts in calculating theamount of the taxable estate. |
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3) Earl, a resident ofWyoming (which imposes a general sales tax), goes to Montana (which does notimpose a general sales tax) to purchase his automobile. Will Earl successfullyavoid the Wyoming sales tax? Explain. |
Earl will be required to payWyoming the use tax if, and when, he applies for the Wyoming license plates. Inthis case, the use tax probably is the same amount as the Wyoming sales tax. |
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4) Earl switches employersduring the year. He earns $90,000subject to FICA from one employer and $40,000 in wages subject to FICA from theother employer. Calculate the amount ofsocial security taxes he would be entitled to receive as a refundable credit. |
$130,000 ($90,000 + $40,000)(118,500) (Maximum wage basesubject to social security)$ 11,500 X 6.2% = $713 |
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5)Sammy and Jane, who are married and file joint, have adjusted gross income of$310,000 and net investment income of $90,000. Calculate the additional Medicare tax that they will have to pay as aresult of their net investment income. |
3.8%X Lesser of: $90,000of Net Investment Income Or $310,000(250,000)$60,000 $60,000X 3.8% = $2,280 |
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6) John files his calendaryear individual income tax return on February 15, 20X2. He later discovers that an error in his favorhas been made on his return. What is thelatest date he can file an amended return to receive money back from theInternal Revenue Service? |
April 15, 20X5 |
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7) Brianna, a calendar yeartaxpayer, files her income tax return for 20x5 on February 7, 20x6. Although she makes repeated inquiries, shedoes not receive her refund from the IRS until May 27, 20x6. Is Brianna entitled to interest on herrefund? Explain. |
No. Interest is not paid ifthe refund is made within 45 days of when the return was filed. However, a return is not considered fileduntil its due date. Thus, the periodfrom April 15 to May 27 does not satisfy the 45-day requirement. |
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8) Samantha files her incometax return 65 days after the due date of the return without obtaining anextension from the IRS. Along with thereturn, she remits a check for $10,000, which is the balance of the tax sheowes. Disregarding the interest element,what are Samantha’s penalties for not having filed on a timely basis and forfailure to pay? |
5%/month X 3 months (afraction of a month counts as a full month) X $10,000 = $1,500 |
