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21. How much of the $17,500 gross distribution reported on Form 1099-R is taxable in 2017? $________.

(Do not enter dollar signs, commas, periods, or decimal points in your answer.)

Solution

18. B $110 (Refer 2017 Tax reporting statement)

19. A. The entire distribution is not taxable

20. The capital gain of $3000 in the current year is adjusted against the carry forward capital loss of $3450 and a net longterm capital loss carry over of $450 is shown in line 13

21. The distribution code in box 7 is 7 - Normal distribution and hence the taxable amount is $17500

22. A . Yes a portion of social security income is taxable as combined income crosses $ 25000

23.

To qualify for and claim the Earned Income Credit you must:

Therefore answer is D. Yes they are eligible for the credit.

24.

Federal Income tax witheheld = 2400+120+450+1750+1560+2200 = 8480

Social security tax withheld = 2365+902+1252.4 = 4519.4

Medicare tax withheld = 553.18+210.98+292.9 = 1057.06