Determine Mr

question 49

Essay

Determine Mr. Smith's 2016 filing status in each of the following independent cases.
a. Mr. Smith and Mrs. Smith were legally divorced on December 1. Mr. Smith has not remarried and has no dependent children.
b. Mr. Smith and the first Mrs. Smith were legally divorced on February 10. Mr. Smith remarried the second Mrs. Smith on December 5. He has no dependent children.
c. Mrs. Smith dies on June 22. Mr. Smith has not remarried and has no dependent children.
d. Mrs. Smith died on November 1, 2014. Mr. Smith has not remarried and maintains a home for one dependent child.
e. Mrs. Smith died on April 3, 2015. Mr. Smith has not remarried and has no dependent children.
f. Mr. and Mrs. Smith were legally divorced on September 10, 2013. Mr. Smith has not remarried and maintains a home for his two dependent children.

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Definitions:

Zero-coupon Bonds

Bonds that do not pay periodic interest and are sold at a discount from their face value; the return comes from the difference between the purchase price and the face value paid at maturity.

Yield To Maturity

The total return expected on a bond if it is held until the date it matures, including all interest payments and the repayment of the principal.

Annual Interest

The amount of money earned or paid on an investment or loan over a one-year period, expressed as a percentage of the principal.

Coupon Rate

Coupon rate is the annual interest rate paid by a bond, expressed as a percentage of the bond's face value, and is a critical factor in determining the bond's yield.