Kellen dies. Kellen's wife died 5 years ago. Kellen's gross estate is valued at $12 million. Hisfuneral and administrative costs total $40,000. Kellen owes a total of $600,000 on a mortgage andother debts. Assuming the Federal Estate Tax Exemption is $11,800,000 and the estate tax rate is40%, how much is Dan's estate tax liability?None. $0.00.$440,000.00Refund of $176,000.00O $176,000.00

Estate tax refers to the amount of tax levied by the federal government of US on the transfer of…

Answered: Kellen dies. Kellen's wife died 5 years…

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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Right before his death from a terminal illness, Shing makes a gift of $705,000 cash to his churcha gift that he had planned to bequeath to the church anyway. Presuming Shing had a marginal Federal income tax rate of 35% and his Federal estate tax bracket is 40%, what is the tax effect of his lifetime transfer. Ignore the 20 % / 30 % /50 % / 60% contribution limitations. If an amount is zero, enter "0". f gifted during his lifetime, Shing will save $ in income taxes. If made as a bequest from his estate, the estate will save$ in estate taxes.
36. One year prior to his death, Bobby lends his son $250,000 at a 10% interest rate per year to purchase land. As part of the promissory note, the promissory note will cancel upon Bobby's death. At the time of death no payments were made and Bobby did not seek payment from his son. Assuming this is John's only asset, what is the value of his gross estate? a. $0 b. $25,000 c. $250,000 d. $275,000
Nicanor left the following bank deposits upon his death: Uno Bank- Php 1,000,000 Dos Bank Php 2,000,000 Tri Bank - Php 3.000.000 a. How much is the amount to be reported as part of gross estate assuming the heirs of Nicanor opted for final tax? b. How much is the final tax required to be withheld by the bank assuming the heirs will opt for final tax? c. How much is the estate tax?
Samuel Jenkins made two investments; the first was 13 months ago and the second was two months ago. He just sold both investments and has a capital gain of $5,000 on each. If Samuel is single and has taxable income of $40,000, what will be the amount of capital gains tax on each investment? See Capital Gains table and Taxable income rate table. Investment 1 (held 13 months) Investment 2 (held 2 months) Capital Gains Tax
In the current tax year, a taxpayer sells a painting for $12,000. She purchased the painting two years ago for $8,000. The short-term capital gains rate is 25%. The long-term capital gains rate is 15%. What is the taxpayer's gain for the current tax year? O $600 short-term capital gain. O $600 long-term capital gain. O $1,000 long-term capital gain. O$1,000 short-term capital gain An individual with a taxable income of $50,000 sells 300 shares of stock at a market price of $100 per share. At the individual's present level of income, there is a marginal ordinary income tax rate of 25% and a long-term capital gains rate of 15%. 200 shares of the stock were acquired 13 months earlier at a price of $80 per share, and 100 shares were acquired two years earlier at a price of $60 per share. What is this individual's tax liability after this transaction? O $2,000 O $1,800 O $8,000 O $1,200
During the year, Mitchell, a single taxpayer, gave the following gifts: $10,000 cash to his nephew $20,000 tuition paid for his 24-year-old daughter, paid directly to the State University $20,000 cash to his brother 50 shares of stock to his niece valued at $200 a share Assume an annual gift exclusion of $17,000. In filing his annual gift tax return, what is the amount of his taxable gifts?
Jimmy has fallen on hard times recently. Last year he borrowed $343,000 and added an additional $73,000 of his own funds to purchase $416,000 of undeveloped real estate. This year the value of the real estate dropped dramatically, and Jimmy’s lender agreed to reduce the loan amount to $316,000. For each of the following independent situations, indicate the amount Jimmy must include in gross income: (Leave no answer blank. Enter zero if applicable.) Problem 5-60 Part-c (Algo) c. The real estate is worth $277,800 and Jimmy has $47,200 in other assets but no other liabilities. Amount Included in Gross Income
1. The Smiths are a family of four with the wife earning $150,000 and the husband earning $50,000. Their two children are young enough to qualify for the child tax credit of $2000 per child. The standard deduction for a couple is $25,000 and there are no personal exemptions. The tax brackets are 10% up to $25,000, 20% up to $75,000 and then 30% on taxable income above $75,000. 1C. Suppose the Smiths live in FL (sunny and no state income tax) but have a $300K home taxed at 2%, what is the sum of their annual Federal, SS, Medicare and Property Taxes?
1. For 2022, Jane and Leo are married taxpayers who file a joint tax return with AGI of $50,000. Both are under 40 years old. During the year they incurred the following expenses: Medical insurance premiums Hospital bills (knee replacement for Leo) 2,200 Hospital bills (face lift for Jane) 2,500 Doctor bills 850 Dentist bills 150 Eyeglasses 450 Acupuncture treatments (for Leo's knee pain prior to his operation) 300 In addition, their insurance company reimbursed them $3,000 for the above expenses. Using the format below, calculate Jane and Leo's deduction for medical and dental expenses for 2022. $ $3,000 Total balance Less 7.5% of adjusted gross income $ Medical deduction $
Tyson (48 years old) owns a traditional IRA with a current balance of $50,000. The balance consists of $30,000 of deductible contributions and $20,000 of account earnings. Tyson's marginal tax rate is 25 percent. Convinced that his marginal tax rate will increase in the future, Tyson receives a distribution of the entire $50,000 balance of his traditional IRA. He retains $12,500 to pay tax on the distribution and he contributes $37,500 to a Roth IRA. What amount of income tax and penalty must Tyson pay on this series of transactions? Multiple Choice O $12,500 income tax; $3,000 penalty. $0 income tax; $0 penalty. $12,500 income tax; $5,000 penalty. $12,500 income tax; $1,250 penalty.
When Michelle was 48 years old, she invested $100,000 into a deferred annuity. Eight years later, the value of the annuity is $217.000, If Michelle makes a $20,000 withdrawal from the annuity, how is this withdrawal taxed? A. $9217 of the withdrawal is considered to be a tax-free return of her principal and $10.783 is both taxable as ordinary income and subject to the 10% early withdrawal penalty B.The $20.000 is treated as a tax-free return of her basis. C.The $20,000 is both taxable as ordinary income and subject to the 10% early withdrawal penalty. D.The $20.000 is simply treated as taxable, ordinary income.
Aiden is married and has salary income of $80,000 and total itemized deductions is $30,000. During the year, he sold two investments resulting in a $5,000 long-term capital gain and a $15,000 short-term capital loss. He calculated his AGI to be $70,000 (80,000 -10,000) and his taxable income to be $40,000 (70,000-30,000). Based on the tax formula and the net capital loss rules, comment on whether or not the adjusted gross income and taxable income are correct. Explain and provide support for your position.

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