Demarco and Janine Jackson have been married for 20 years and have four children (no children under age 6 at year- end) who qualify as their dependents (Damarcus. Jasmine, Michael, and Candice). The couple received salary income of $101.500 and qualified business Income of $13,500 from an Investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $217,500 and they sold it for $267,500. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons Incurred $17.200 of Itemized deductions (no charitable contributions), and they had $4,000 withheld from their paychecks for federal taxes. They are also allowed to clalm a child tax credit for each of their children. However, because Candice was 18 years of age at year end, the
Jacksons may claim a child tax credit for other qualifying dependents for Candice. (Use the tax rate schedules.)
Required:
c. What would their taxable income be if their itemized deductions totaled $28,700 Instead of $17,200?
d. What would their taxable income be if they had $0 Itemized deductions and $7.400 of for AGI deductions? e. Assume the original facts but now suppose the Jacksons also incurred a loss of $5,350 on the sale of some of their investment
assets. What effect does the $5,350 loss have on their taxable Income? 1. Assume the original facts but now suppose the Jacksons own investments that appreclated by $10,000 during the year. The Jacksons believe the investments will continue to appreclate, so they did not sell the investments during this year. What is the
Jacksons' taxable Income?