3-31. Tom and Linda are married taxpayers who file a joint return.

They have itemized deductions of $12,250 and four exemptions. Assuming an adjusted gross income of $40,000, what is their taxable income for 2012? Adjusted Gross Income Less: Itemized Deductions Less: Personal Exemptions (4*$3,800) Taxable Income 3-32. Compute Marie's taxable income for 2012, assuming she is single and claims two dependent children. Her adjusted gross income is $70,000, and she has itemized deductions of $9,000. Adjusted Gross Income Less: Itemized Deductions Less: Personal Exemptions (3*$3,800) Taxable Income 3-36. Compute Stanley's taxable income for 2012, assuming he has $1,000 in wages from working in a grocery store and $2,000 in interest income from some bonds he owns. Stanley, age 16, is claimed as a dependent on his parents' return. Gross Income ($1,000+$2,000) Less: Standard Deduction ($1,000+$300) Taxable Income 13-55. Mr. Z, a non-dealer, sold assets on an installment plan. Determine Mr. Z's gross income for 2012. Relevant data include: Year 2010 2011 2012 Installment Sales $200,000 300,000 400,000 Gross Profit $50,000 81,000 96,000 2012 Collections $25,000 80,000 125,000 $3,000 $1,300 $1,700 $70,000 $ 9,000 $11,400 $49,600 $ 40,000 $ 12,250 $ 15,200 $ 12,550

Gross Profit Percentage 2010 = 50,000/200,000 = .25 2011 = 81,000/300,000 = .27 2012 = 96,000/400,000 = .24

Collections 2010 ($25,000*.25) 2011 ($80,000*.27) 2012 ($125,000*.24) Total Gross Income for 2012 13-69.

$ 6,250 $21,600 $30,000 $57,850

Comprehensive Problem. Bill is a cash-basis, calendar-year taxpayer. Which of the following December items result in gross income or deductions for the current year? a. Check received for December rent, $700, not deposited until January 4. Gross Income for the current year. b. Check for $1,100 to pay Bill's state income taxes mailed December 28, cashed January 7. Deduction for the current year. c. Cash received in the amount of $500 for services to be rendered the following year. Gross Income for the current year. d. Interest of $800 credited to his savings account, added to Bill's account balance. Gross Income for the current year e. Check received for January rent, $700, deposited on January 9. Gross Income for the current year f. Charitable contribution of $300, charged on Bill's MasterCard. Deduction for the current year g. Bills totaling $2,000 sent for services rendered during the year, uncollected as of year-end. Neither for the current year, this is an uncollected income and will be included in gross income when collected