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- Ray and Maria Gomez have been married for 3 years. Ray is a propane salesman for Palm Oil Corporation and Maria works as a city clerk for the City of McAllen. Ray's birthdate is February 21, 1992 and Maria's is December 30, 1994. Ray and Maria each received a W-2 from their respective employers (see separate tab). Ray and Maria have interest income from McAllen State Bank which is reported a 1099-INT form (see separate tab). In addition, they own U.S. Savings bonds (Series EE). The bonds had a value of $10,000 on January 1, 2020, and their value is $10,700 on December 31, 2020. They have not made an election with respect to these bonds. Ray has an ex-wife named Judy Gomez. Pursuant to their January 27, 2015 (pre-2019) divorce decree, Ray pays her $450 per month in alimony. All payments were made on time in 2020. Judy's Social Security number is 566-74-8765. During 2020, Ray was in the hospital for a successful operation. His health insurance company reimbursed Ray $4,732 for all of his…VijayJohn and Martha Holloway are married filing jointly. They are 35 and 31 years old, respectively. Their address is 10010 Dove Street, Atlanta, GA 30294. Additional information about Mr. and Mrs. Holloway is as follows: Social security number: John: 412-34-5670 Date of birth: 3/4/1986 W-2 for John shows these amounts: Wages (box 1) = $ 22,000.00 Federal W/H (box 2) = $ 1,500.00 Social security wages (box 3) = $ 22,000.00 Social security W/H (box 4) = $ 1,364.00 Medicare wages (box 5) = $ 22,000.00 Medicare W/H (box 6) = $ 319.00 Social security number: Martha: 412-34-5671 Date of birth: 8/20/1990 W-2 for Martha shows these amounts: Wages (box 1) = $ 35,500.00 Federal W/H (box 2) = $ 3,100.00 Social security wages (box 3) = $ 35,500.00 Social security W/H (box 4) = $ 2,201.00 Medicare wages (box 5) = $ 35,500.00 Medicare W/H (box 6) = $ 514.75 Form 1099-DIV for Martha shows this amount: Box 1a and box 1b = $345.00 from MAR Brokerage. Form 1099-INT for Martha shows these amounts: Box 1 =…
- Jan owns her own service business and also owns some blue-chip stock. She is starting to retire and she wants her son, Matt, to take over the business and also generally be in charge of looking after Jan. In X1, Matt began working for the business and Jan paid Matt a salary. She also signed over 25% of her own earnings to Matt. On July 1, X1, Jan gifted the blue-chip stock to Matt. On September 15, X1 the stock paid dividends. On her X1 tax return, Jan reported 75% of the earnings from her service business and none of the dividends (taking the position that these items were income to Matt). The IRS is auditing the return and assert that all of the business earnings and all of the dividends should have been reported by Jan. Required: Discuss a) the business earnings, and b) the dividends. Is the IRS correct? Why or why not? What information is needed to make the decision? Provide a couple of scenarios. Jan owns her own service business and also owns some blue-chip stock. She is starting…Joe and Jessie are married and have one dependent child, Lizzie. Lizzie is currently in college at State University. Joe works as a design engineer for a manufacturing firm, while Jessie runs a craft business from their home. Jessie's craft business consists of making craft items for sale at craft shows that are held periodically at various locations. Jessie spends considerable time and effort on her craft business, and it has been consistently profitable over the years. Joe and Jessie own a home and pay interest on their home loan (balance of $220,000) and a personal loan to pay for Lizzie's college expenses (balance of $35,000). Neither Joe nor Jessie is blind or over age 65, and they plan to file as married joint. Assume that the employer portion of the self-employment tax on Jessie's income is $658. Joe and Jessie have summarized the income and expenses they expect to report this year as follows: Income: Joe's salary Jessie's craft sales Interest from certificate of deposit…Joe purchases a block of land in the western suburbs of Adelaide as an investment on 31 march 1988 for $50,000 incurring fees on purchase totaling $2,000. By 31 December 1988, he builds a house on the land costing $24,000. By 30 June 1990, he erects a large garage on the rear of the property costing $8,000. In May 2021, he decides to sell the investment property. On 1 June 2021 he enters in to contract to sell the property for $400,000 and receives payment on settlement on 31 July 2021, He incurs selling cost of $12,000 Calculate joe’s net capital gain for the financial year ending 30 June 2021 using both discounting and indexation methods if applicable. $152,000(discount method) and $236,224(indexation method) $152,000(discount method) and $272,448(indexation method) $76,000(discount method) and $272,448 (indexation method) $76,000(discount method) and $136,224(indexation method)
- 35.Allen and Meagan, aged 43 and 33, have 2 children aged 6 and 8. They live in their own home, which is jointly owned. The family home is currently worth $675,000, which is on a $275,000 mortgage loan. They have contents worth $100,000. Allen works as a part-time accountant and earns a $32,000 annual salary. In addition to this job, he runs an accounting services business, which earns him $25,000 annually. This business was valued at $45,000 by an independent assessor when he applied for a loan last year, which was not approved. Allen’s employer pays superannuation guarantee payments to an industry superannuation fund, which has accumulated to $50,000. This superannuation fund provides term life cover of $100,000 for Allen. Meagan works as a sales manager and earns $75,000 p.a. Currently, she has $175,000 in her superannuation account. She doesn’t have life insurance cover. On average, Allen, Meagan and the family have monthly living expenses amounting to $8,500. They would like to…