Kim Jae-Yun owns a condo worth $270,000, a car valued at $30,500, and miscellaneous assets worth $15,500. She owes $179,000 on the condo and $11,000 on the car and has no other debts. Her retirement account, in which she is fully vested, contains $34,500 in mutual funds. She was just insured with a $680,000 term life insurance policy. What are her total assets?
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- Robert owns a $140,000 townhouse and still has an unpaid mortgage of $110,000. In addition to his mortgage, he has the following liabilities: Visa $565 MasterCard 480 Discover card 395 Education loan 920 Personal bank loan 800 Auto loan 4,250 Total $7,410 Robert’s net worth (not including his home) is about $21,000. This equity is in mutual funds, an automobile, a coin collection, furniture, and other personal property. What is Robert’s debt-to-equity ratio? Has he reached the upper limit of debt obligations? ExplainLO.2 Selma operates a contractor's supply store. She maintains her books using the cash method. At the end of 2023, her accountant computes her accrual basis income that is used on her tax return. For 2023, Selma had cash receipts of $1,400,000, which included $200,000 collected on accounts receivable from 2022 sales. It also included the proceeds of a $100,000 bank loan. At the end of 2023, she had $250,000 in accounts receivable from customers, all from 2023 sales. a. Compute Selma's accrual basis gross revenues for 2023. b. Selma paid cash for all of the purchases. The total amount paid for merchandise in 2023 was $1,300,000. At the end of 2022, she had merchandise on hand with a cost of $150,000. At the end of 2023, the cost of merchandise on hand was $300,000. Compute Selma's gross income from merchandise sales for 2023.Tamar owns a condominium near Cocoa Beach in Florida. In 2022, she incurs the following expenses in connection with her condo Insurance Advertising expense Mortgage interest Property taxes Repairs & maintenance : Utilities Depreciation $1,100 550 3,850 945 700 1,000 9,500 During the year, Tamar rented out the condo for 75 days, receiving $10,000 of gross income. She personally used the condo for 35 days during her vacation. Tamar's itemized deduction for nonrental taxes is less than $10,000 by more than the property taxes allocated to the rental use of the property. Problem 14-58 Parts a, b, c, d & e (Algo) Assume Tamar uses the IRS method of allocating expenses to rental use of the property. Required: a. What is the total amount of for AGI (rental) deductions Tamar may deduct in the current year related to the condo? b. What is the total amount of itemized deductions Tamar may deduct in the current year related to the condo? c. If Tamar's basis in the condo at the beginning of the…
- Jane has a gross estate estimated at $12 million. Approximately 75% of her estate is attributable to the value of personal property and collectible items. Jane is married but has no children. Her husband does not have a large estate because he spends money freely and foolishly. Since Jane is much older than her husband, she would like for him to benefit from her wealth after her death without giving him control over the principal either while he is alive or at his death. Jane wants as little of her estate assets as possible to go toward payment of estate taxes. She currently has no will but has come to you for advice regarding provisions she should put in a will. Which provision, if placed in her will, would be best to increase the liquidity of her estate and accomplish her other goals? A) Establish a testamentary trust naming her husband as the income beneficiary and trustee B) Establish a power of appointment trust naming her husband as the income beneficiary and a…Sue, aged 48 and Paul, aged 49 have two daughters- Leena aged 17 and Reena aged 15. Sue works as a part-time teacher in a secondary school and earns a $26,000 p.a. salary (plus minimum superannuation guarantee contribution).Paul works as a dentist and earns $145,000 (plus minimum superannuation guarantee contribution). Paul is anxious about their post-retirement financial situation. The couple has approached you for financial advice in respect of reducing the tax payable and their retirement planning. Superannuation Sue (20% Tax Free) 270,000 Sue’s Superannuation asset allocation Investment Asset Allocation Performance p.a. after tax Australian Share 50% 4% Cash & Fixed Interest 15% 1.4% International Shares 30% 10.80% Property 5% 3.10% Calculate the expected return for Sue’s superannuation portfolio using the return for the year ended 2022. Explain to Sue why her superannuation…30 After reviewing her financial affairs, Jasmine has determined that she would like the $75,000 death benefit from one of her insurance policies to go to a local registered charity. The whole life policy in question has a $45,000 cash surrender value (CSV) and she pays an annual premium of $500. Jasmine's current cash flow situation is quite good. She is living a comfortable retirement. However, she is worried as she has assets, that of the taxes that will be payable after her death will result in considerable capital gains. She is unable to purchase a new life insurance to cover the income tax triggered at death because of her health. What should Jasmine do to fulfill her desire to donate $75,000 to the registered charity and alleviate the taxes payable following her death? NVBDQncreUJQWW1 Ya0w4cWZjYVhIQT09 → a. O Surrender the life insurance policy and donate the CSV. b. O Name the registered charity as beneficiary of the life insurance policy. c. O Assign the life insurance policy…
- 14. Françoise has just inherited $90,000. In the event of her own death, she would like to leave this money to ensure the financial security of her son Maxime He is 18 years old and recently entered college to study philosophy. Françoise is a self-employed landscaper and snow-removal contractor. She recently had to take out loans to upgrade her equipment. Françoise is not sure whether she should invest her inheritance in a segregated fund with Maxime as the beneficiary or build an equity portfolio with better returns. Her priority is to provide for her son's future. If she were to one day declare bankruptcy, would the two investments Françoise is considering be protected from creditors? Only the segregated fund would be protected. Only the equity portfolio would be protected. O Both investments would be protected. ONeither investment would be protected. Choose 1 optionMarvin had the following transactions: Salary Compensation of body injury due to car accident Bank loan (proceeds used to buy personal auto) Alimony payment to ex-wife (divorce settled in 2018) Child support payment Gift from aunt Gain from sale of city of Bloomington bonds 5,000 Interest from City of Bloomington Bonds Interest received on the U.S. Government bonds Interest received on corporate (GE company) bonds Lottery winnings Life insurance proceed after her grandmother died Calculate Marvin's AGI: $50,000 15200 10,000 6,000 12,000 20,000 500 1,500 350 500 150,000Cora, 79, has an estate that includes her personal residence valued at $120,000 and $18,000 in a bank account that is solely in her name. She would like to arrange her estate so that she maintains exclusive control of the assets during her lifetime, but at her death the assets will pass to her friend, Mabel, outside of probate. Based on Cora's goals and situation, which of the following are correct statements about will substitutes that she could use? She should put her bank account in tenancy in common with Mabel. She should title her personal residence in joint tenancy with her friend, Mabel. She should execute a will that names her friend, Mabel, as the legatee of the bank account and the devisee of the personal residence. She should place the bank funds in a payable on death (POD) account with Mabel as beneficiary. She should change the title on her personal residence to indicate a life estate reserved for her lifetime and a remainder to her friend, Mabel. A)IV and V…
- Sharon and Brian are in good health and have reasonably secure careers. Each earns $45,000 annually. They own a home with a $125,000 mortgage; they owe $25,000 for their car loans and have $22,000 in student loans. If one should die, they think that funeral expenses would be $12,000. What is their total insurance need using the DINK method?George has a gross estate valued at $1.8 million. His estate consists almost entirely of publicly held stock owned solely by him. He owes no debts. George's only living relative is a nephew whom he hasn't seen or heard from in 30 years. George has not executed a valid will. If George were to die in the current year without change in any of the related facts, which one of the following is a disadvantage of the probate process for George? A) It will not allow payment of a personal representative's fee to reduce his estate tax so that it can be covered by the allowable unified credit. B) It will not allow George's estate to be subject to court supervision regarding payment of claims and distribution. C) It will not allow George's estate to claim a marital deduction to reduce the taxable estate. D) It will not allow distribution of his estate without incurring considerable cost in attempting to locate his nephew.Kate Beckett and her two children, Austin and Alexandra, moved into the home of her new husband, Richard Castle, in New York City. Kate is a novelist, and her hus-band is a police detective. The family income consists of the following: $60,000 from Kate’s book royalties; $90,000 from Richard’s salary; $10,000 in life insurance proceeds from a deceased aunt; $140 in interest from savings; $4,380 in alimony from Kate’s ex-husband; $14,200 in child support from her ex-husband; $500 cash as a Christmas gift from Richard’s parents; and a $1,600 tuition-and-books scholarship Kate received to go to college part time last year. (a) What is the total of their reportable gross income?(b) After Richard put $5,600 into qualified retirement plan accounts last year, what is their adjusted gross income?(c) How many exemptions can the family claim, and how much is the total value allowed the household?(d) How much is the allowable standard deduction for the household?(e) Their itemized deductions are…
