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Demarco and Janine Jackson have been married for $20$ years and have four children who qualify as their dependents $($Damarcus$,$ Jasmine, Michael, and Candice$).$ The Jacksons file a joint tax return. The couple received salary income of $$105,000$ and qualified business income of $$10,000$ from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $$200,000,$ and they sold it for $$250,000.$ The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $$16,500$ of itemized deductions, and they had $$4,000$ withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Candice is $18$ years of age at year$-$end, the Jacksons may claim a child tax credit for other qualifying dependents for Candice.

a$)$ What is the Jacksons$$ taxable income, and what is their tax liability or $($refund$)?$

b$)$ Complete the Jacksons$$ Form $1040,$ pages $1,2,$ and Schedule $1($use the most recent form available$).$

c$)$ What would their taxable income be if their itemized deductions totaled $$34,000$ instead of $$16,500?$

d$)$ What would their taxable income be if they had $$0$ itemized deductions and $$6,000$ of for AGI deductions?

e$)$ Assume the original facts but now suppose the Jacksons also incurred a loss of $$5,000$ on the sale of some of their investment assets. What effect does the $$5,000$ loss have on their taxable income?

f$)$ Assume the original facts but now suppose the Jacksons own investments that appreciated by $$10,000$ during the year. The Jacksons believe the investments will continue to appreciate, so they did not sell the investments during this year. What is the Jacksons$$ taxable income?

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