Solution Manual for Income Tax Fundamentals 2019 37th Edition by Whittenburg.

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.) 27