MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
20th Edition
ISBN: 9781259969614
Author: SPILKER
Publisher: MCG
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Textbook Question
Chapter 5, Problem 75CP
Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer. Determine Ken’s gross income and complete page 2 of Form 1040 (through line 6) and Schedule 1 for Ken.
- a) Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal).
- b) Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share.
- c) Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $210,000.
- d) Ken received $13,000 in disability benefits for the year. He purchased the disability insurance policy last year.
- e) Ken decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car payment.
- f) Ken’s son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike to Ken. Ken received the check on December 30 in the amount of $1,100.
- g) Ken received a $610 refund of the $3,600 in state income taxes his employer withheld from his pay last year. Ken claimed $12,050 in itemized deductions last year (the standard deduction for a single filer was $12,000).
- h) Ken received $30,000 of interest from corporate bonds and
money market accounts.
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Determine Ken's gross income.
Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com.
Though Ken is retired, he is still very active. Ken reported the following financial information this year.
Assume Ken files as a single taxpayer.Ken won $1,200 in an illegal game of poker (the game was played in
Utah, where gambling is illegal).
1. Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or
investment) in the stock was $31 per share.
2. Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be
paid annually for 20 years, for $210,000.
3. Ken received $13,000 in disability benefits for the year. He purchased the disability insurance policy last
year.
4. Ken decided to go back to school to learn about European history. He received a $500 cash scholarship
to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car…
Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is
retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single
taxpayer.
a. Ken won $1,540 in an illegal game of poker (the game was played in Utah, where gambling is illegal).
b. Ken sold 1,340 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the
stock was $31 per share.
c. Ken received $28,400 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for
20 years, for $238,560.
d. Ken received $13,850 in disability benefits for the year. He purchased the disability insurance policy last year.
e. Ken decided to go back to school to learn about European history. He received a $840 cash scholarship to attend. He
used $470 to pay for his books and tuition, and he applied the rest toward his new car payment.
f. Ken's son, Mike,…
Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken Is
retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single
taxpayer.
a. Ken won $1,260 In an illegal game of poker (the game was played in Utah, where gambling is illegal).
b. Ken sold 1,060 shares of stock for $32 a share. He Inherited the stock two years ago. His tax basis (or Investment) in the
stock was $31 per share.
c. Ken received $25,600 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for
20 years, for $215,040..
d. Ken received $13,150 in disability benefits for the year. He purchased the disability Insurance policy last year.
e. Ken decided to go back to school to learn about European history. He received a $560 cash scholarship to attend. He
used $330 to pay for his books and tuition, and he applied the rest toward his new car payment.
f. Ken's son, Mike,…
Chapter 5 Solutions
MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
Ch. 5 - Based on the definition of gross income in 61 and...Ch. 5 - Based on the definition of gross income in 61,...Ch. 5 - Describe the concept of realization for tax...Ch. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Compare how the return of capital principle...Ch. 5 - This year Jorge received a refund of property...Ch. 5 - Describe in general how the cash method of...
Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Contrast the constructive receipt doctrine with...Ch. 5 - Dewey is a lawyer who uses the cash method of...Ch. 5 - Clyde and Bonnie were married this year. Clyde has...Ch. 5 - Distinguish earned income from unearned income,...Ch. 5 - Prob. 17DQCh. 5 - Prob. 18DQCh. 5 - Prob. 19DQCh. 5 - George purchased a life annuity to provide him...Ch. 5 - Prob. 21DQCh. 5 - Prob. 22DQCh. 5 - Clem and Ida have been married for several years,...Ch. 5 - Larry Bounds has won the Gold Bat Award for...Ch. 5 - Prob. 25DQCh. 5 - Prob. 26DQCh. 5 - Prob. 27DQCh. 5 - Explain why an insolvent taxpayer is allowed to...Ch. 5 - Prob. 29DQCh. 5 - Prob. 30DQCh. 5 - Prob. 31DQCh. 5 - Prob. 32DQCh. 5 - Explain how state and local governments benefit...Ch. 5 - Prob. 34DQCh. 5 - Prob. 35DQCh. 5 - Prob. 36DQCh. 5 - Prob. 37DQCh. 5 - Tom was just hired by Acme Corporation and has...Ch. 5 - For the following independent cases, determine...Ch. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - Prob. 44PCh. 5 - Last year Acme paid Ralph 15,000 to install a new...Ch. 5 - Prob. 46PCh. 5 - L. A. and Paula file as married taxpayers. In...Ch. 5 - Clyde is a cash-method taxpayer who reports on a...Ch. 5 - Identify the amount, if any, that these...Ch. 5 - Ralph owns a building that he is trying to lease....Ch. 5 - Anne purchased an annuity from an insurance...Ch. 5 - Larry purchased an annuity from an insurance...Ch. 5 - Prob. 53PCh. 5 - Lanny and Shirley divorced in 2018 and do not live...Ch. 5 - Prob. 55PCh. 5 - Grady received 8,200 of Social Security benefits...Ch. 5 - Prob. 57PCh. 5 - Nikki works for the Shine Company, a retailer of...Ch. 5 - Prob. 59PCh. 5 - Prob. 60PCh. 5 - Grady is a 45-year-old employee with AMUCK Garbage...Ch. 5 - Prob. 62PCh. 5 - Prob. 63PCh. 5 - Cecil cashed in a Series EE savings bond with a...Ch. 5 - Prob. 65PCh. 5 - Prob. 66PCh. 5 - Terry was ill for three months and missed work...Ch. 5 - Prob. 68PCh. 5 - Prob. 69PCh. 5 - This year, Janelle received 200,000 in life...Ch. 5 - Prob. 71PCh. 5 - Prob. 72PCh. 5 - Charlie was hired by Ajax this year as a corporate...Ch. 5 - Irene is disabled and receives payments from a...Ch. 5 - Ken is 63 years old and unmarried. He retired at...Ch. 5 - Prob. 76CPCh. 5 - Diana and Ryan Workman were married on January 1...
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