The tax year for these questions is 2005
1. Sue is a 50 percent working partner in a partnership. She is guaranteed an annual salary of $60,000. Jim, the other 50 percent partner, is to receive the first $10,000 of partnership profit before the balance is divided equally between them. During the year, the partnership’s accounting results were $40,000 of income before any partner allocations. What amount of income will Sue be taxed on?
2. A and B are equal shareholders in AB, a calendar-year S corporation. On June 30, A sells one-half of her stock to C. The corporation reports $30,000 of income for the year. How much of this income is allocated to A, B, and C?
3. Sonja is a talented 15-year-old dancer and has earned quite a bit of interest over the last six years from the money that her parents have invested for her. During 2005, she earned $3,800 from dancing and $2,850 in interest. If her parents claim her as a dependent, what is her income tax liability in the current year?
4. Sophie has AGI of $47,000. Her itemized deductions after limitations are $1400 for medical expenses , $700 in property taxes, $4500 of mortgage interest and $800 for charitable contributions. What are her AMTI itemized deductions?