Provide this question solution general accounting Computation of Taxable Income, Jim and Pat are married andfile jointly. In 2016, Jim earned a salary of $46,000. Pat is selfemployed. Her gross income was $49,000 and her businessexpenses totaled $24,000. Each contributed $5,000 to adeductible IRA. Their itemized deductions total $13,000.Compute the gross income, adjusted gross income, and theirtaxable income assuming they have a dependent daughter.Compute without regards to self-employment tax.

Step 1: Define Personal ExemptionsWhen computing income tax liabilities, a personal exemption was…

Answered: Computation of Taxable Income, Jim and…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter28: Income Taxation Of Trusts And Estates

Section: Chapter Questions

Problem 25P

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Arthur and Cora are married and have 2 dependent children. They have a gross income of 95,000. Their allowable deductions for adjusted gross income total 4,000, and they have total allowable itemized deductions of 26,250. a. What is Arthur and Coras taxable income? b. What is Arthur and Coras income tax? c. If Arthur has 3,900 and Cora has 3,600 withheld from their paychecks, are they entitled to a refund, or do they owe additional taxes?
Sammy and Monica, both age 67, incur and pay medical expenses in excess of insurance reimbursements during the year as follows. Sammy and Monicas 2019 AGI is 130,000. They file a joint return. Chuck and Carter are Sammy and Monicas dependents. a. What is Sammy and Monicas medical expense deduction for regular income-tax purposes? b. What is Sammy and Monica's AMT adjustment for medical expenses?
During the year, Rachel earned 18,000 of interest income on private activity bonds that she had purchased in 2014. She also incurred interest expense of 7,000 in connection with amounts borrowed to purchase the bonds. How do these amounts affect Rachels taxable income? Could there be a related beneficial effect in calculating AMTI? Explain.
During 2019, Inez (a single taxpayer) had the following transactions involving capital assets: a. If Inez has taxable income of 158,000, how much income tax results? b. If Inez has taxable income of 35,000, how much income tax results?
During the 2019 tax year, Brian, a single taxpayer, received $ 7,400 in Social Security benefits. His adjusted gross income for the year was $14,500 (not including the Social Security benefits) and he received $ 30,000 in tax-exempt interest income and has no for-AGI deductions, Calculate the amount of the Social Security benefits that Brian must include in his gross income for 2019. SIMPIFIED TAXABLE SOCIAL SECURITY WORKSHEET (FOR MOST PEOPLE) 1. Enter the total amount of Social Security income. 2. Enter one-half of line 1 3. Enter the total of taxable income items on Form 1040 except Social Security income. 4. Enter the amount of tax-exempt interest income. 5. Add lines 2,3, and 4 6. Enter all adjustments for AGl except for student loan interest, the domestic production activities deduction, and the tuition and fees deduction. 7. Subtract line 6 from line 5 . If zero or less, stop here, none of the Social Security benefits are taxable. 8. Enter $ 25,0001 $ 32,000 if married filing jointly; 0 if married filing separately and living with spouse at any time during the year) 9. Subtract line 8 from line 7 . If zero or less, enter -0 - Note: If line 9 is zero or less, stop here; none of your benefits are faxable. Otherwise, go on to line 10 10. Enter $ 9,0001 $12,000 if married filing jointly; 0 if married filing separately and living with spouse at any time during the year) 11. Subtract line 10 from line 9. If zero or less, enter -0 -. 12. Enter the smaller of line 9 or line 10 . 13. Enter one-half of line 12 14. Enter the smaller of line 2 or line 13 . 15. Multiply line 11 by 85 (. 85 ). If line 11 is zero, enter -0 -. 16. Add lines 14 and 15 17. Multiply line 1 by 85(.85) 18. Taxable benefits. Enter the smaller of line 16 or line 17 . 1.____________ 2.____________ 3.____________ 4.____________ 5.____________ 6.____________ 7.____________ 8.____________ 9.____________ 10.____________ 11.____________ 12.____________ 13.____________ 14.____________ 15.____________ 16.____________ 17.____________ 18.____________
In 2019, Lou has a salary of $53,300 from her job. She also has interest income of $1,600 and dividend income of $ 400. Lou is single and has no dependents. During the year, Lou sold silver coins held as an investment for a $7,000 loss. Calculate the following amounts for Lou: Adjusted gross income $ ____________________ Standard deduction $ ____________________ Taxable income $ ____________________
Compute the 2019 AMT exemption for the following taxpayers. a. Bristol, who is single, reports AMTI of 650,000. b. Marley and Naila are married and file a joint tax return. Their AMTI is 1,528,000.
Leroy and Amanda are married and have three dependent children. During the current year, they have the following income and expenses: Salaries 120,000 Interest income 45,000 Royalty income 27,000 Deductions for AGI 3,000 Deductions from AGI 9,000 a. What is Leroy and Amandas current year taxable income and income tax liability? b. Leroy and Amanda would like to lower their income tax. How much income tax will they save if they validly transfer 5,000 of the interest income to each of their children? Assume that the children have no other income and that they are entitled to a 1,050 standard deduction.
Arthur Wesson, an unmarried individual who is age 68, reports taxable income of 510,000 in 2019. He records positive AMT adjustments of 80,000 and preferences of 35,000. Arthur itemizes his deductions, and his regular tax liability in 2019 is 153,694. a. What is Arthurs AMT? b. What is the total amount of Arthurs tax liability? c. Draft a letter to Arthur explaining why he must pay more than the regular income tax liability. Arthurs address is 100 Colonels Way, Conway, SC 29526.

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