Desmond is 25 years old, and he participates in his employer's 401(k) plan. During the year, hecontributed $3,000 to his 401(k) account.What is Desmond's saver's credit in each of the following alternative scenarios? (Use Exhibit 13-8)Note: Leave no answer blank. Enter zero if applicable.a. Desmond is not married and has no dependents. His AGI after deducting his 401(k) contributionis $40,000.b. Desmond is not married and has no dependents. His AGI after deducting his 401(k) contributionis $17,500.c. Desmond files as a head of household and has an AGI of $44,000.d. Desmond and his spouse file jointly and report an AGI of $30,000 for the year.

The retirement savings contribution credit—the "saver’s credit" for short—is a tax credit worth up…

Answered: Desmond is 25 years old, ar

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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Kay turned 73 on March 17th of Year 2 (which was after the year 2023 and before the year 2033). Her profit-sharing account balance was $500,000 at the end of Year 1 and $550,000 at the end of Year 2. Her beneficiary is her favorite granddaughter, Jordan, who turned 12 years old on July 23rd of Year 2. Assume that the joint life expectancy factor for a 73-year-old and a 12-year-old is 73 and the joint life expectancy for a 74-year-old and a 13-year-old is 72. Also, assume that the life expectancy factor based on the uniform lifetime table for someone who is 72, 73 and 74, is 27.4, 26.5, and 25.5, respectively. Kay takes a distribution of $10,000 in November of Year 1 and in Year 2. What is the Kay's minimum distribution for Year2? $18,868. $6,849. $20,073. $20,755.
2.Colin is 35 years old and inherits an IRA from his mother, who dies prematurely at age 60. Which of the following statements is correct regarding his options for the inherited IRA? Colin does not have to take distributions until his mother would have been 70 years old. Colin can rollover the IRA into his own IRA. Colin can take out the entire distribution within ten years and avoid all penalties. Colin must take distributions over his single life expectancy.
Mitch and Bill are both age 75. When Mitch was 23 years old, he began depositing $1300 per year into a savings account. He made deposits for the first 10 years, at which point he was forced to stop making deposits. However, he left his money in the account, where it continued to earn interest for the next 42 years. Bill didn't start saving until he was 46 years old, but for the next 29 years he made annual deposits of $1300. Assume that both accounts earned an average annual return of 4% (compounded once a year). Complete parts (a) through (d) below. A) How much money does Mitch have in his account at age 75? B) How much money does Bill have in his account at age 75. C) Compare the amounts of money that Mitch and Bill deposit into their accounts. Mitch deposits _ in his accunt and Bill deposits _ in his account. D) Draw a onclusion about the parable. Choose the correct answer. -Bill ends up with more money in his account than Mitch because he makes more deposits than…
7
John, age 40, is single and has the following income and expenses for 2020: Salary $170,000 Net rental income $7,200 Dividend income (qualified) $4,000 Interest from TD bank $65 Interest from City of Phila bonds $1,200 Loss on sale of section 1244 stock purchased directly from the Corporation $40,000. Alimony payment (divorce finalized December 30, 2018) $12,000. Loss on personal auto as a result of an auto accident $2,500 Contribution to traditional IRA $5,000 Charitable contributions $750 Mortgage interest on personal residence $12,000 Real estate taxes $4,500 State income taxes $5,219 Parking ticket (occurred during work related meeting) $100. Medical expenses (not reimbursed) $4.980. Calculate John’s AGI, taxable income and tax liability for 2020.
2. Lee is 30 years old and single. Lee paid all the costs of maintaining his household for the entire year. Determine Lee's filing status in each of the following alternative situations: Filing Status Lee is Ashton's uncle. Ashton is 15 years old and has gross income of $5,000. Ashton lived in Lee's home from April 1 through the end of the year. Lee is Ashton's uncle. Ashton is 20 years old, not a full-time student, and has gross income of $7,000. Ashton lived in Lee's home from April 1 through the end of the year. Lee is Ashton's uncle. Ashton is 22 years old and was a full-time student from January through April. Ashton's gross income was $5,000. Ashton lived in Lee's home from April 1 through the end of the year. Lee is Ashton's cousin. Ashton is 18 years old, has gross income of $3,000, and is not a full-time student. Ashton lived in Lee's home from April 1 through the end of the year.
Shemar and Jordan are cousins who were both born on the same day, and both turned 25 today. Their grandfather began putting $2,900 per year into a trust fund for Shemar on his 20th birthday, and he just made a 6th payment into the fund. The grandfather (or his estate's trustee) will make 40 more $2,900 payments until a 46th and final payment is made on Shemar's 65th birthday. The grandfather set things up this way because he wants Shemar to work, not be a "trust fund baby," but he also wants to ensure that Shemar is provided for in his old age. Until now, the grandfather has been disappointed with Jordan, hence has not given him anything. However, they recently reconciled, and the grandfather decided to make an equivalent provision for Jordan. He will make the first payment to a trust for Jordan today, and he has instructed his trustee to make 40 additional equal annual payments until Jordan turns 65, when the 41st and final payment will be made. If both trusts earn an annual return of…
50. Mr. O, Filipino, married, died on August 1, 2018, three years after his marriage to Mrs. O. He left the following: a. Property inherited by Mr. O from his father who died February 14, 2013 b. Property inherited by Mrs. O from her father who died February 14, 2014 c. Property inherited by Mr. O from his mother who died February 14, 2015 d. Property inherited by Mrs. O from her mother who died February 14, 2016 c. Property acquired thru the labor of P3,000,000 1,200,000 1,800,000 1,400,000 Mr. O Mrs. O Mr. & Mrs. O (family bome) 2,000,000 1,500,000 2,400,000 1,600,000 f. Other personal property Deductions claimed by the estate: a. Funeral expense b. Unpaid mortgages on property in letters: a 500,000 c. Claims against the estate d. Accrued taxes (before the death of Mr.O) 220,000 b. 300,000 c. 180,000 d 200,000 170,000 80,000 Determine the net taxable estate assuming 1. Conjugal partnership of gains 2. Absolute community of property
Wade (49) and Colleen (50) are married. They have two children, Jacob (20) and Lucella (15), who both lived with their parents all year. Jacob is not a student, but he has a part-time job. Lucella is still in high school. Wade and Colleen provide more than 50% support for both children. Wade's wages were $27,500; Colleen's wages were $17,900; Jacob's gross income was $5,100; Lucella's was $0. 1, What is Wade's correct and most favorable 2019 filing status? 2. Does Wade meet the qualifications for claiming the Child Tax Credit/Additional Child Tax Credit or the Other Dependent Credit? Choose the best answer. Wade is eligible to claim the Child Tax Credit/Additional Child Tax Credit. Wade is eligible to claim the Other Dependent Credit. Wade is not eligible to claim the Child Tax Credit/Additional Child Tax Credit or the Other Dependent Credit. 3. Wade (49) and Colleen (50) are married. They have two children, Jacob (20) and Lucella (15), who both lived with their parents…
Rachel is 20 years old. She plans on retiring in 40 years when she will be 60 years old. Rachel believes she will live until she is 105. In order to live comfortably, she needs a substantial retirement income. She wants to receive a weekly income of $5,000 during retirement. The payments will be made at the beginning of each week during her retirement. Also, Rachel has pledged to make an annual donation to her favorite charity during her retirement. There will be a total of 45 payments. The payments will be made at the end of each year. The first annual payment will be for $20,000. Rachel wants the annual payments to increase by 3% per year. The payments will end when she dies. In addition, she would like to establish a scholarship at Toronto Metropolitan University. The first payment from scholarship would be $50,000. The first scholarship payment would be made 7 years after she retires. Thereafter scholarship payments will be made every year. She wants the payments to continue after…
At age 20, Kari purchased a whole life insurance policy with face value of $370,000. She is now 35 and wants to cancel her policy. Use Table 19-3 to calculate the amount of reduced paid-up insurance to which she is entitled (in $).
Ashvin

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