jj Problem 9-20 (LO. 1, 3, 5)Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children who live with her (all are under age 16).She also maintains the household in which her parents live and furnished 60% of their support. Charlotte's father earned $2,400 from apart-time job and received $5,500 of municipal bond interest. Charlotte has a salary of $81,800, a short-term capital loss of $2,000, a cashprize of $4,000 from a church raffle, and itemized deductions of $10,500.Click here to access the Components of the tax formula to use, if required. If an amount is zero, enter "$0". Ignore any creditsfor which she may qualify.a. Compute Charlotte's taxable income.b. Using the Tax Rate Schedules (click here), tax liability (before any allowable credits) for Charlotte is sfor 2023.

Taxable Income shows all the income earned during the year and the tax is computed on the income…

Answered: Charlotte (age 40) is a surviving…

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 35P

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John Benson, age 40, is single. His Social Security number is 111-11-1111, and he resides at 150 Highway 51, Tangipahoa, LA 70465. John has a 5-year-old child, Kendra, who lives with her mother, Katy. As a result of his divorce in 2016, John pays alimony of 6,000 per year to Katy and child support of 12,000. The 12,000 of child support covers 65% of Katys costs of rearing Kendra. Kendras Social Security number is 123-45-6789, and Katys is 123-45-6788. Johns mother, Sally, lived with him until her death in early September 2019. He incurred and paid medical expenses for her of 15,588 and other support payments of 11,000. Sallys only sources of income were 5,500 of interest income on certificates of deposit and 5,600 of Social Security benefits, which she spent on her medical expenses and on maintenance of Johns household. Sallys Social Security number was 123-45-6787. John is employed by the Highway Department of the State of Louisiana in an executive position. His salary is 95,000. The appropriate amounts of Social Security tax and Medicare tax were withheld. In addition, 9,500 was withheld for Federal income taxes and 4,000 was withheld for state income taxes. In addition to his salary, Johns employer provides him with the following fringe benefits. Group term life insurance with a maturity value of 95,000; the cost of the premiums for the employer was 295. Group health insurance plan; Johns employer paid premiums of 5,800 for his coverage. The plan paid 2,600 for Johns medical expenses during the year. Upon the death of his aunt Josie in December 2018, John, her only recognized heir, inherited the following assets. Three months prior to her death, Josie gave John a mountain cabin. Her adjusted basis for the mountain cabin was 120,000, and the fair market value was 195,000. No gift taxes were paid. During the year, John reported the following transactions. On February 1, 2019, he sold for 45,000 Microsoft stock that he inherited from his father four years ago. His fathers adjusted basis was 49,000, and the fair market value at the date of the fathers death was 41,000. The car John inherited from Josie was destroyed in a wreck on October 1, 2019. He had loaned the car to Katy to use for a two-week period while the engine in her car was being replaced. Fortunately, neither Katy nor Kendra was injured. John received insurance proceeds of 16,000, the fair market value of the car on October 1, 2019. On December 28, 2019, John sold the 300 acres of land to his brother, James, for its fair market value of 160,000. James planned on using the land for his dairy farm. Other sources of income for John are: Potential itemized deductions for John, in addition to items already mentioned, are: Part 1Tax Computation Compute Johns net tax payable or refund due for 2019. Part 2Tax Planning Assume that rather than selling the land to James, John is considering leasing it to him for 12,000 annually with the lease beginning on October 1, 2019. James would prepay the lease payments through December 31, 2019. Thereafter, he would make monthly lease payments at the beginning of each month. What effect would this have on Johns 2019 tax liability? What potential problem might John encounter? Write a letter to John in which you advise him of the tax consequences of leasing versus selling. Also prepare a memo addressing these issues for the tax files.
Robert A. Kliesh, age 41, is single and has no dependents. Roberts Social Security number is 111-11-1115. His address is 201 Front Street, Missoula, MT 59812. He does not contribute to the Presidential Election Campaign fund through the Form 1040. Robert works as a financial analyst and is very well regarded in his field. This year his salary totaled 650,000. His professional success has allowed him to purchase investments in real estate and corporate stocks and bonds. He also spends time volunteering with various organizations that help people develop financial literacy skills. Examination of Roberts financial records provides the following information for 2018. a. On January 16, Robert sold 1,000 shares of stock for a loss of 12,000. The stock was acquired 14 months ago for 17,000 and sold for 5,000. On February 15, he sold 400 shares of stock for a gain of 13,100. That stock was acquired in 2010 for 6,000 and sold for 19,100. b. He received 30,000 of interest on private activity bonds that he purchased in 2015. He also received 40,000 of interest on tax-exempt bonds that are not private activity bonds. c. Robert received gross rent income of 190,000 from an apartment complex he owns. He qualifies as an active participant in the activity. The property is at 50 Big Sky Resort Road, Big Sky, Montana, 59716. d. Expenses related to the apartment complex, acquired in 2009, were 225,000. e. Roberts taxable interest income, all from corporate bonds, totaled 23,000. Because he invests only in growth stocks, he receives no dividend income. f. He won 60,000 in the Montana lottery. g. Robert was the beneficiary of an 800,000 life insurance policy on the life of his uncle Jake. He received the proceeds in October. h. In February, Robert exercised an incentive stock option that was granted by his employer in 2015. The strike price of the option was 10 per share. On the date of exercise, the fair market value of the stock was 25 per share. Robert purchased 400 shares with the option; as of the end of the year, he still owns the stock (current FMV 20 per share). i. Robert incurred the following potential itemized deductions. 5,200 fair market value of stock contributed to the Red Cross (3,000 stock basis). He had owned the stock for two years. Robert also made cash contributions of 8,000 to qualified organizations during the year. 4,200 interest on consumer purchases. 8,900 state and local income tax. 15,000 of medical expenses that he paid on behalf of his administrative assistant, who unexpectedly took ill. 8,000 paid for lottery tickets associated with playing the state lottery. 750 contribution to the campaign of the Democratic candidate for governor of Montana. Because Robert lived in Montana, he paid no state-income tax. Robert made estimated Federal tax payments of 210,000, and he was covered by health insurance for the entire tax year. Use Forms 1040 and 6251 and Schedules A, B, D, and E to compute the tax liability (including AMT) for Robert A. Kliesh for 2018. Omit Forms 8283, 8582, and 8949. Suggested software: ProConnect Tax Online.
Ashley Panda lives at 1310 Meadow Lane, Wayne, OH 43466, and her Social Security number is 123-45-6777. Ashley is single and has a 20-year-old son, Bill. His Social Security number is 111-11-1112. Bill lives with Ashley, and she fully supports him. Bill spent 2018 traveling in Europe and was not a college student. He had gross income of 4,655 in 2018. Bill paid 4,000 of lodging expenses that Ashley reimbursed after they were fully documented. Ashley paid the 4,000 to Bill using a check from her sole proprietorship. That amount is not included in the items listed below. Ashley had substantial health problems during 2018, and many of her expenses were not reimbursed by her health insurance. Ashley owns Panda Enterprises, LLC (98-7654321), a data processing service that she operates as a sole proprietorship. Her business is located at 456 Hill Street, Wayne, OH 43466. The business activity code is 514210. Her 2018 Form 1040, Schedule C for Panda Enterprises shows revenues of 315,000, office expenses of 66,759, employee salary of 63,000, employee payroll taxes of 4,820, business meal expenses (before the 50% reduction) of 22,000, and rent expense of 34,000. The rent expense includes payments related to renting an office (30,000) and payments related to renting various equipment (4,000). There is no depreciation because all depreciable equipment owned has been fully depreciated in previous years. No fringe benefits are provided to the employee. Ashley personally purchases health insurance on herself and Bill. The premiums are 23,000 per year. Ashley has an extensive stock portfolio and has prepared the following analysis: Note: Ashley received a Form 1099B from her stockbroker that included the adjusted basis and sales proceeds for each of her stock transactions. The per-share cost includes commissions, and the per-share selling price is net of commissions. Also, the dividends are the actual dividends received in 2018, and these are both ordinary dividends and qualified dividends. Ashley had 800 of interest income from State of Ohio bonds and 600 of interest income on her Wayne Savings Bank account. She paid 25,000 of alimony to her former husband. His Social Security number is 123-45-6788. Ashley itemizes her deductions and provides the following information, which may be relevant to her return: Ashley made a 26,000 estimated Federal income tax payment, does not want any of her taxes to finance presidential elections, has no foreign bank accounts or trusts, and wants any refund to be applied against her 2019 taxes. Compute Ashleys net tax payable or refund due for 2018. If you use tax forms for your computations, you will need Form 1040 and its Schedules 1, 4, 5, A, C, D, and SE and Form 8949. Ashley qualifies for the 199A deduction for qualified business income. Be sure to include that in your calculations. Suggested software: ProConnect Tax Online.
Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children (ages 4, 8, 11, and 14) who live with her. She also maintains the household in which her parents live and furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte has a salary of $80,000, a short-term capital loss of $2,000, a cash prize of $4,000 from a church raffle, and itemized deductions of $10,500. Click here to access the standard deduction table to use, if required. If an amount is zero, enter "$0". a. Compute Charlotte's taxable income. $fill in the blank: 56,900 (correct) b. Using the Tax Rate Schedules (click here), tax liability (before any allowable credits) for Charlotte is $fill in the blank: 6,430 for 2021. (correct) c. Compute Charlotte's child and dependent tax credit. Charlotte's child tax credit is $fill in the blank: 12,600 (Incorrect) , of which $fill in the…
Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children who live with her (all are under age 16). She also maintains the household in which her parents live and furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte has a salary of $80,000, a short-term capital loss of $2,000, a cash prize of $4,000 from a church raffle, and itemized deductions of $10,500. FILING STATUS 2019 2020 Single 12,200 12,400 Married, Filing Jointly 24,400 24,800 Surviving spoise 24,400 24,800 Head of Household 18,350 18,650 Married, Filing Seperate 12,200 12.400 A. a. Compute Charlotte's taxable income. B b. Using the Tax Rate Schedules (See attached), tax liability (before any allowable credits) for Charlotte is $ *Blank* for 2020. C. c. Compute Charlotte's child and dependent tax credit.Charlotte's child tax credit is $ ________, of which $…
1. In 2021, Ivanna, who has three children under age 13, worked full-time while her spouse, Sergio, was attending college for nine months during the year. Ivanna earned $47,100 and incurred $10,275 of child care expenses. Click here to access the percentage chart to us for this problem. Determine amount of Ivanna and Sergio's child and dependent care credit. 2. In 2021, Ivanna, who has three children under age 13, worked full-time while her husband, Sergio, was attending college for nine months during the year. Ivanna earned $47,000 and incurred $6,400 of child care expenses. Click here to access the percentage chart to us for this problem. Determine amount of Ivanna and Sergio's child and dependent care credit.
Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children, who live with her. Charlotte also maintains the household in which her parents live, and she furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte’s father received $2,400 from a part-time job. Charlotte earns an $80,000 salary, a short-term capital loss of $2,000, and a cash prize of $4,000 at a church raffle. Charlotte reports itemized deductions of $10,500. Use tax figures for 2022.a. Compute Charlotte's taxable income.b. Using the Tax Rate Schedules , tax liability for Charlotte is $ for 2022.c. Compute Charlotte's child and dependent tax credit.
Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children (ages 4, 8, 11, and 14) who live with her. She also maintains the household in which her parents live and furnished 60% of their support. Charlotte's father earned $2,400 from a part-time job and received $5,500 of municipal bond interest. Charlotte has a salary of $81,800, a short-term capital loss of $2,000, a cash prize of $4,000 from a church raffle, and itemized deductions of $10,500. Click here to access the Components of the tax formula to use, if required. If an amount is zero, enter "$0". a. Compute Charlotte's taxable income. X b. Using the Tax Rate Schedules (click here), tax liability (before any allowable credits) for Charlotte is $ for 2023. c. Compute Charlotte's child and dependent tax credit. Charlotte's child tax credit is $ refundable and her dependent tax credit is may be refundable. of which $ ' may be of which $

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