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Augustus1 Augustus1
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Posts: 1894
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2 years ago
In addition to social security benefits of $8,000, Mr. and Mrs. Wells have adjusted gross income of $32,000 and tax-exempt interest of $1,000 and will file a joint return. The taxable portion of their social security benefits will be
A) $0.
B) $2,500.
C) $4,000.
D) $8,000.
Textbook 

Prentice Hall's Federal Taxation: 2011: Individuals


Edition: 14th
Authors:
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We do not judge the people we love.

Prentice Hall's Federal Taxation by Kramer
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MsLippyMsLippy
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Posts: 1848
2 years ago
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B
Here's why: ($32,000 + $1,000 + $4,000 [one-half of social security]) - $32,000 = $5,000.00 × 0.50 = $2,500 subject to the ceiling limit of one half of social security benefits, which is $4,000. Eighty-five percent of a portion of the social security benefits are subject to tax only if provisional income exceeds $44,000 on a joint return, or $34,000 for a single taxpayer.
1

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wrote...
2 years ago
You're a saint, honestly

Thank you
We do not judge the people we love.

Prentice Hall's Federal Taxation by Kramer
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