Self-Study Problem 2.12
Simplified Taxable Social Security Worksheet (for most people)
1. Enter the total amount of Soc ial Security income 1. 13,000
2. Enter one-half of line 1 2.
6,500
3. Enter the total of taxable income items on Form 1040 except Social
Security income
3.
20,000
4. Enter the amount of tax exempt interest income 4.
30,000
5. Add lines 2, 3, and 4 5.
56,500
6. Enter all adjustments for AGI except for student loan interest, the domestic
production activities deduction, and the tuition and fees deduction
6.
–0–
7. Subtract line 6 from line 5. If 0 or less, stop here, none of the Social
Security benefits are taxable
7.
56,500
8. Enter $25,000 ($32,000 if married filing jointly; $0 if married filing
separately and living with spouse at any time during the year)
8.
32,000
9. Subtract line 8 from line 7. If 0 or less, enter –0– 9.
24,500
Note: If line 9 is 0 or less, stop here; none of your benefits are taxable.
Otherwise, go on to line 10.
10. Enter $9,000 ($12,000 if married filing jointly; $0 if married filing sepa-
rately and living with spouse at any time during the year)
10.
12,000
11. Subtract line 10 from line 9. If 0 or less, enter –0– 11.
12,500
12. Enter the smaller of line 9 or line 10 12.
12,000
13. Enter one-half of line 12 13.
6,000
14. Enter the smaller of line 2 or line 13 14.
6,000
15. Multiply line 11 by 85% (.85). If line 11 is 0, enter –0– 15.
10,625
16. Add lines 14 and 15 16.
16,625
17. Multiply line 1 by 85% (.85) 17.
11,050
18. Taxable benefits. Enter the smaller of line 16 or line 17 18.
11,050
Self-Study Problem 2.13
$3,000 Unemployment compensation is fully taxable.
Self-Study Problem 2.14
1. Excluded
2. Included
3. Excluded
4. Excluded
5. Included
6. Included
7. Excluded
Chapter 3 Business Income and Expenses, Part I
.............................................. ......................................
Self-Study Problem 3.1
See Schedule E on page S-9.
Self-Study Problem 3.2
See Form 8582 on page S-11.
Solutions to Self-Study Problems S-7
Copyright 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s).
Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it.