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Garth is a single cash basis activities/transactions in 2021. In 2020, Garth had adjusted gross ince itemized deductions of $12,700, and paid $23,012 in federal income tax. Indicate the amount of each independent statement below that is included in Garth's recognized income (i.e. gross income) for tax year 2021. • Sold primary family home for $700,000. The home was purchased in 1980 for $450,000. Include • Received state income tax refund of $625 for overpayment of 2020 state income tax. Include rod on his tree-cutting job.

Garth is a single cash basis activities/transactions in 2021. In 2020, Garth had adjusted gross ince itemized deductions of $12,700, and paid $23,012 in federal income tax. Indicate the amount of each independent statement below that is included in Garth's recognized income (i.e. gross income) for tax year 2021. • Sold primary family home for $700,000. The home was purchased in 1980 for $450,000. Include • Received state income tax refund of $625 for overpayment of 2020 state income tax. Include rod on his tree-cutting job.

FINANCIAL ACCOUNTING
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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Garth is a single cash basis taxpayer (filing status = single since 1980) and has the foilowng activities/transactions in 2021. In 2020, Garth had adjusted gross income of $70,000, took itemized deductions of $12,700, and paid $23,012 in federal income tax. Indicate the amount of each independent statement below that is included in Garth's recognized income (i.e. gross income) for tax year 2021. • Sold primary family home for $700,000. The home was purchased in 1980 for $450,000. Include • Received state income tax refund of $625 for overpayment of 2020 state income tax. Include • Received $8,000 in worker's compensation after he was injured on his tree-cutting job. Include • Dental insurance provided by his employer, who paid $1,550 in dental insurance premiums for the year. Include for the year. Include Garth provided 100 hours of carpentry services (valued at $25 per hour) to the local school in exchange for two football playoff tickets (valued at $6,000). Include • Garth recently was sickened by eating spoiled peanut butter. He successfully sued the manufacturer for his medical bills ($3,700), his emotional distress ($6,000 he now fears peanut butter), and punitive damages ($44,000). Include • Garth and Camilla got divorced in 2011. Under the terms of the decree, Camilla pays Garth $70,000 in cash each year, decreased to $22,000 when their son turns 19 years old. In addition, Camilla will transfer a castle worth $2,000,000 to Garth. Include Garth purchased an annuity that provides $13,000 annual payments for the next 40 years. The annuity was purchased at a cost of $300,000. The annuity made its first payment this year. Include
Transcribed Image Text:Garth is a single cash basis taxpayer (filing status = single since 1980) and has the foilowng activities/transactions in 2021. In 2020, Garth had adjusted gross income of $70,000, took itemized deductions of $12,700, and paid $23,012 in federal income tax. Indicate the amount of each independent statement below that is included in Garth's recognized income (i.e. gross income) for tax year 2021. • Sold primary family home for $700,000. The home was purchased in 1980 for $450,000. Include • Received state income tax refund of $625 for overpayment of 2020 state income tax. Include • Received $8,000 in worker's compensation after he was injured on his tree-cutting job. Include • Dental insurance provided by his employer, who paid $1,550 in dental insurance premiums for the year. Include for the year. Include Garth provided 100 hours of carpentry services (valued at $25 per hour) to the local school in exchange for two football playoff tickets (valued at $6,000). Include • Garth recently was sickened by eating spoiled peanut butter. He successfully sued the manufacturer for his medical bills ($3,700), his emotional distress ($6,000 he now fears peanut butter), and punitive damages ($44,000). Include • Garth and Camilla got divorced in 2011. Under the terms of the decree, Camilla pays Garth $70,000 in cash each year, decreased to $22,000 when their son turns 19 years old. In addition, Camilla will transfer a castle worth $2,000,000 to Garth. Include Garth purchased an annuity that provides $13,000 annual payments for the next 40 years. The annuity was purchased at a cost of $300,000. The annuity made its first payment this year. Include
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