1. Morgan (age45) is single and provides more than 50% of the support of Rosalyn (a family friend), Flo (a niece, age 18), and Jerold (a nephew, age 18). Both Rosalyn and Flo live with Morgan, but Jerold (a French citizen) lives in Canada. Morgan earns a salary of $ 95,000, contributes$ 5,000 to a traditional IRA, and receives sales proceeds of $ 15,000 for an RV that cost $ 60,000 and was used for vacations. She has $ 8,200 in itemized deductions. Using the Tax Rate Schedules, compute the 2016 tax liability for Morgan.
2. Which of the following individuals are required to file a tax return for 2016? Should any of these individuals file a return even if filing is not required? Why or why not?
Patricia, age 19, is a self-employed single individual with gross income of $ 5,200 from an unincorporated business. Business expenses amounted to $ 4,900.
Mike is single and is 67 years old. His gross income from wages was $ 10,800.
Ronald is a dependent child under age 19 who received $ 6,500 in wages from a part-time job.
Sam is married and files a joint return with his spouse, Lana. Both Sam and Lana are 67 years old. Their combined gross income was $ 24,250.
Quinn, age 20, is a full-time college student who is claimed as a dependent by his parents. For 2016, Quinn has taxable interest and dividends of $ 2,500.
3. In each of the following independent situations, determine Winston’s filing status for 2016. Winston is not married.
Winston lives alone, but he maintains a household in which his parents live. The mother qualifies as Winston’s dependent, but the father does not.
Winston lives alone but maintains a household in which his married daughter, Karin, lives. Both Karin and her husband (Winston’s son-in-law) qualify as Winston’s dependents.
Winston maintains a household in which he and a family friend, Ward, live. Ward qualifies as Winston’s dependent.
Winston maintains a household in which he and his mother-in-law live. Winston’s wife died in 2015.
Same as (d), except that Winston’s wife disappeared (i, e., she did not die) in 2014.