IncomeTax 1-Assignment 2
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School
University of Arkansas, Pine Bluff *
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Course
3320
Subject
Industrial Engineering
Date
Dec 6, 2023
Type
doc
Pages
4
Uploaded by katlinpridgeon12
Assignment
2
Total Point
30
Please show your computation properly for those questions specifically mentioned to get
the full points.
Assignment must be submitted on the blackboard.
1.
Roger Burrows, age 19, is a full-time student at Marshall College and a candidate for a bachelor's
degree. During 20X1
, he received the following payments:
State scholarship for tuition
$3,600
Loan from college financial aid office
1,500
Cash support from parents
3,000
Cash dividends on qualified investments
700
Cash prize award in contest
500
$9,300
What is Burrows's adjusted gross income for 20X1?
(Please show your computation
clearly in the space provided below)
(4 Pts)
$700 + $500 =
$1,200
2.
James and Edna Smith are a childless married couple who lived apart for all of 2019. On
December 31, 2019, they were legally separated under a decree of separate maintenance. Which
of the following is the only filing status choice available to them for 2019?
(2 Pts)
a.
Married filing joint return.
b.
Married filing separate return.
c.
Head of household.
d.
Single.
3.
During 2019, Milton Hanover was granted a divorce from his wife. The divorce decree stipulated
that he was to pay both alimony and child support for a specified period of time. In examining his
records for 2019
, the following information is available:
Salary
$50,000
Interest received on bank deposits
2,000
Interest received on municipal obligations
1,000
$53,000
Alimony paid
3,600
Child support
4,800
What is Hanover's adjusted gross income for 2019?
(3 Pts)
a.
$44,600
b.
$48,400
c.
$49,400
d.
$52,000
4.
Don Driller, who is 56 years old, is provided with $120,000 of group-term life insurance by his
employer. Based on the IRS uniform premium cost table, the total annual cost of a policy of this
type is $9.00 per $1,000 of coverage per year. Don’s salary is
$78,000 per year.
How much of
the cost must Don include in his income for 20X1?
(Please show your computation
clearly in the space provided below)
(4 Pts)
$120,000 / $1,000* $9=$1080
$1,080 – ($50,000 * 12months) =
$1,080 - $600 =
Excess coverage = $48
5.
Mr. W. is 66 years old and single. His income for 20X1
consisted of the following:
Taxable pension
$10,000
Taxable interest
2,000
Taxable dividends
5,000
Social security payments
5,000
Tax-exempt interest
7,000
He did not have any adjustments to income. What amount of W's social security benefits is
taxable?
(Please show your computation clearly in the space provided below)
(5
Pts)
$5000 * 15% =
$750
6.
All of the following are
de minimis
fringe benefits except:
( 2 pts)
a.
Occasional use of the copy machine
b.
Annual summer picnic sponsored by the company
c.
Occasional taxi fare home when working late
d.
Occasional use of the company’s credit card to buy your son a small gift
7.
Randi, a flight attendant, received wages of $30,000 in 20X1. The airline provided transportation
on a standby basis, at no charge, from her home in Detroit to the airline's hub in Chicago. The fair
market value of the commuting flights was $5,000. Also in 20X1, Randi received
reimbursements, under an accountable plan, of $10,000 for overnight travel, but only spent
$6,000. The excess was returned. Randi became disabled in November 20X1 and received
worker's compensation of $4,000. What amount must Randi include in gross income on her 20X1
tax return?
( 3 Pts)
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a.
$30,000
b.
$34,000
c.
$35,000
d.
$37,000
8.
Participation in a cafeteria plan is allowed to which of the following:
( 2 Pts)
a.
employee
b.
spouse of employee
c.
child of employee
d.
all of the above
9.
Mary and Peter Smith purchased a joint and survivorship annuity contract for $30,000.
The
contract provided for the couple to receive $150 per month for life.
Upon the death of one
spouse, the surviving spouse would continue to receive $150 per month.
According to the table
of ordinary joint life and last survivor annuity based on the age is 22.9.
Peter was 69 years age
and Mary is 66 years age.
What will be the exclusion ratio?
(Please show your
computation clearly in the space provided below)
( 5 Pts)
$30,000 / 274.8 * 150 =
$30,000 / 41220 * 100 = 72.78%
$150 * 78.72%
= $109.17