Chapter 1 TRP 1-1Assume the taxpayer does NOT wish to contribute to the Presidential Election Fund, unless otherwise stated in the problem. Inaddition, the taxpayers did NOT receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currencyduring the year.Alex Montgomery is single and lives at 3344 Bayview Drive, Richmond Hill, GA 31324. His SSN is 412-34-5670. He recently graduatedfrom the Savannah College of Art and Design and works as a video game developer. His Form W-2 contained the followinginformation.Wages (box 1) =Federal W/H (box 2) =Social security wages (box 3) =Social security W/H (box 4) =Medicare wages (box 5) =Medicare W/H (box 6) -Required:Prepare a Form 1040 for Alex. Use the appropriate Tax Tables.Note: Do not round intermediate computations. Round your final answers to the nearest whole dollar amount. Input all the valuesas positive numbers. Instructions can be found on certain cells within the forms.$ 72,288.22$9,137.20$ 72,288.22$ 4,481.87$ 72,288.22$ 1,048.181040 for a single taxpayer with no dependents.1040 PG 11040 PG 2Page 2 of Form 1040 Some information does not carry over from Pane 1 Use provided information and follow instructions on formC

Form 1040 is the U.S. Individual Income Tax Return form. It is the standard form used by individuals…

Answered: Assume the taxpayer does NOT wish to…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Determine the total amount that will qualify for itemized deduction by the taxpayer. Rita needed some cash to attend a friend's 21st birthday COVID-themed bash in Nashville, but eas bit short of the amount required for the (safe)travel. She borrowed $500 form her sister for the trip and two months later repaid the amount along with $25 extra as an interest payment.
Barry and Michelle plan to marry in December 2021. Barry's salary is $60,000 and he owns his residence. His itemized deductions total $18,550 ($6,100 of which are charitable contributions). Michelle's salary is $95,000. Her itemized deductions total only $11,000 (none of which are charitable contributions) as she does not own her residence. (Click the icon to view the standard deduction amounts.) (Click the icon to view the 2021 tax rate schedule for the Married filing jointly filing status.) (Click the icon to view the 2021 tax rate schedule for the Single filing status.) Read the requirements. Requirement a. What will their 2021 tax be if they marry before year-end and file a joint return? Adjusted gross income Minus: Itemized deductions Taxable income 155,000 (29,550) 125,450 (Use the 2021 tax rate schedule for all tax calculations. Do not round intermediary calculations. Only round the amount you enter in the input field to the nearest dollar.) Barry and Michelle's gross tax if…
(Federal Taxation, Individual Income Taxes) Janice Morgan, age 24, is single and has no dependents. She is a freelance writer. In January 2019, Janice opened her own office located at 2751 Waldham Road, Pleasant Hill, NM 88135. She called her business Writers Anonymous. Janice is a cash basis taxpayer. She lives at 132 Stone Avenue, Pleasant Hill, NM 88135. Her Social Security number is 123-45-6782. Janice's parents continue to provide health insurance for her under their policy. Janice did not engage in any virtual currency transactions during the year and wants to contribute to the Presidential Election Campaign Fund. During 2019, Janice reported the following income and expense items connected with her business. Income from sale of articles $85,000 Rent 16,500 Utilities…
Jeff is a single taxpayer who sold his home when he was transferred from NY to Denver by hisemployer. He purchased the home on January 10, 2013. He was sent by his company for temporaryassignment to Detroit on February 1, 2016, that lasted for longer and was gone for 16 months in2016 and 2017, during which time he rented out his home. He moved back into the home on June 3,2017. He sold the home on March 15, 2020. Jeff can claim an exclusion of gain on the sale up to:Select one:a. $500,000b. $300,000c. $250,000d. $0
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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 2019 traveling in Europe and was not a college student. He had gross income of $4,655 in 2019. 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 2019, 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 reports as a sole proprietorship. Her business is located at 456 Hill Street, Wayne, OH 43466. The business activity code is 514210. Her 2019 Form 1040, Schedule C for Panda Enterprises shows revenues of $315,000,…
Jane Smith, age 40, is single and has no dependents. She is employed as a legal secretary by Legal Services, Inc. She owns and operates Typing Services located near the campus of Florida Atlantic University at 1986 Campus Drive, Boca Raton, FL 33434. Jane is a material participant in the business. She is a cash basis taxpayer. Jane lives at 2020 Oakcrest Road, Boca Raton, FL 33431. Jane’s Social Security num-ber is 123-45-6781. Jane indicates that she wants to designate $3 to the Presidential Election Campaign Fund. Jane has never owned or used any virtual currency. During 2019, Jane had the following income and expense items: a. $100,000 salary from Legal Services, Inc. b. $20,000 gross receipts from her typing services business. c. $700 interest income from Third National Bank. d. $1,000 Christmas bonus from Legal Services, Inc. e. $60,000 life insurance proceeds on the death of her sister. f. $5,000 check given to her by her wealthy aunt. g. $100 won in a bingo game. h. Expenses…
Sarah is a local CPA who performs part-time bookkeeping services for local businesses and does tax returns during tax season. Sarah does not know about the AICPA Code of Conduct or the IRS Circular 230. Draft a memo for your files and an email to Sarah to answer the questions below. 1. Explain what parts of the AICPA Code of Conduct apply to Sarah. 2. Explain what parts of the IRS Circular 230 apply to Sarah.
[The following information applies to the questions displayed below.] 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 $1,260 in an illegal game of poker (the game was played in Utah, where gambling is illegal). 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. 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. Ken received $13,150 in disability benefits for the year. He purchased the disability insurance policy last year. 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…
Lionel is an unmarried law student at State University Law School, a qualified educational institution. This year Lionel borrowed $36,500 from County Bank and paid interest of $2.190. Lionel used the loan proceeds to pay his law school tuition. Calculate the amounts Lionel can deduct for higher education expenses and interest on higher-education loans under the following circumstances: (Leave no answer blank. Enter zero if applicable.) b. Lionel's AGI before deducting interest on higher-education loans is $79.000. Higher education expenses Interest deduction c. Lionel's AGI before deducting interest on higher-education loans is $90,000. Higher education expenses Interest deduction
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