Inheritance received upon death U1 au Jackson (a cousin) repaid a loan Aiden mad
ID: 2330989 • Letter: I
Question
Inheritance received upon death U1 au Jackson (a cousin) repaid a loan Aiden made to him in 2012 (no interest was provided for) Itemized deductions (state income tax, property taxes on 9,700 residence, interest on home mortgage, and charitable contributions) Number of dependents (children, ages 17 and 18, and mother-in-law, age 70) 43 Age 30. LO.2 Determine the amount of the standard deduction allowed for 2018 in the following independent situations. In each case, assume that the taxpayer a. Curtis, age 18, has income as follows: $700 interest from a certificate of deposit b. Mattie, age 18, has income as follows: $600 cash dividends from a stock invest- c. Jason, age 16, has income as follows: $675 interest on a bank savings account d. Ayla, age 15, has income as follows: $400 cash dividends from a stock invest- Sarah, age 67 and a widow, has income as follows: $500 from a bank savings 31. LO.4 Analyze each of the characteristics in considering the indicated test for denern is claimed as another person's dependent. and $12,200 from repairing cars. ment and $4,700 from handling a paper route. and $800 for painting a neighbor's fence ment and $500 from grooming pets. account and $3,200 from babysitting. e. dency as a qualifying child or qualifying relative, In tha l each listed test (eExplanation / Answer
As per 2018, the standard deduction amount for individual who is claimed as a dependent by another taxpayer cannot exceed greater of $1050 or sum of $350 plus individual's earned income limited to single taxpayer standard deduction a Curtis age 18 has income as follows : $700 interest from a certificate of deposit and $12200 from repairing cars Standard Deduction is higher of below Dependent deduction - $1050 OR Earned Income plus $350 is - $12200 + $350 = $12550 Lessor of this two Single Taxpayer Deduction - 12000 Therefore, the standard deduction is $ 12000 b Mattie, age 18, has income as follows : $600 cash dividends from a stock investment and $4700 from handling a paper route Standard Deduction is higher of below Dependent deduction - $1050 OR Earned Income plus $350 is - $4700 + $350 = $5050 Lessor of this two Single Taxpayer Deduction - $12000 Therefore, the standard deduction is $ 5050 c Jason age 16 has income as follows : $675 interest on a bank savings account and $ 800 for painting a neighbor's fence Standard Deduction is higher of below Single Taxpayer Deduction - $12000 Lower of this Earned Income plus $350 is - $800 + $350 = $1150 OR Dependent deduction - $1050 Therefore, the standard deduction is $ 1150 d Ayla, age 15, has income as follows : $400 cash dividends from a stock investment and $500 from grooming pets Standard Deduction is higher of below Single Taxpayer Deduction - $12000 Lower of this Earned Income plus $350 is - $500 + $350 = $850 OR Dependent deduction - $1050 Therefore, the standard deduction is $ 1050 e Sarah age 67 and a widow has income as follows : $ 500 from a bank savings account and $3200 from babysitting Since Sarah is older than 65, she is eligible for additional $ 1300 of standard deduction Standard Deduction is higher of below 3550+1300 = $4850 Single Taxpayer Deduction - $12000 Lower of this Earned Income plus $350 is - $3200 + $350 = $ 3550 OR Dependent deduction - $1050