Question $1($Chapter $3)$

Jack is a head of household filer. He supports two sons, ages $5$ and $12,$ who live with him. Jack's earned income is $$12,000$ and his Adjusted Gross Income is $$100,000($Jack$\text{'}$s income is largely from investments$).$ What is the maximum refund for which Jack might be eligible based on Chapter $3$ tax credits only?

Question $2($Chapter $3)$

Amanda is a single filer. For $2023,$ she has the following:

Inheritance from deceased grandmother $,30,000$

Interest on Bank of America Corp. bonds $,4,500$

Alimony from x$-$husband$*,9,000$

Unemployment compensation $,4,000$

Proceeds from stolen car sales $,55,000$

Itemized deductions $,(14,000)$

Long$-$term capital loss $,(1,500)$

$*$Divorce agreement was executed on June $5,2019.$

Please calculate her taxable income.

$1$

Question $3($Chapter $5)$

In $2021,$ Top Shelf, an accrual method sole proprietorship, sold clothing on credit for $$650$ to Sarah. In $2022,$ Top Shelf took a bad debt deduction for the $$650.$ In $2023,$ Sarah inherited some money and paid Top Shelf the $$650$ she owed. Top Shelf's owner was in the $22\%$ marginal tax bracket in $2021,$ the $32\%$ marginal tax bracket in $2022,$ and the $24\%$ marginal tax bracket in $2023.$

$($a$)$ Did these events cost Top Shelf money in taxes or save Top Shelf money in taxes? Please circle the appropriate answer.

Cost

Save

$($b$)$ What was the dollar amount of the cost or savings

Please show all work!