Larry Johnson, 45 and single, has the following income and deductions in 2016. Using the tax rateschedules rather than the tax tables, compute Larry's tax owed or refund due for 2016. Assumedividends are not qualified.SalaryInterest IncomeDividendsMedical ExpensesProperty Taxes on Personal ResidenceInterest on Home Mortgage$50,0003,200State and local income taxesState and Local sales taxes800$6,150$3,600$7,600$2,400$2,000Investment Interest Expenses$5,000In addition, Larry's car (value =$15,000, cost = $20,000) was stolen during the year, and the insurancereimbursement was only $7,000. He also had $2,000 of travel expenses related to his job that were notreimbursed and $3,000 of federal income tax withheld from his salary.He elects to treat his dividends as net investment income, so they are not subject to the special long-term capital gains tax rates.

Larry Johnson, 45 and single, has the following income and deductions in 2016. Using the tax rate schedules rather than the tax tables, compute Larry's tax owed or refund due for 2016. Assume dividends are not qualified.

Larry Johnson, 45 and single, has the following income and deductions in 2016. Using the tax rate schedules rather than the tax tables, compute Larry's tax owed or refund due for 2016. Assume dividends are not qualified.

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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Question

Larry Johnson, 45 and single, has the following income and deductions in 2016. Using the tax rate
schedules rather than the tax tables, compute Larry's tax owed or refund due for 2016. Assume
dividends are not qualified.
Salary
Interest Income
Dividends
Medical Expenses
Property Taxes on Personal Residence
Interest on Home Mortgage
$50,000
3,200
State and local income taxes
State and Local sales taxes
800
$6,150
$3,600
$7,600
$2,400
$2,000
Investment Interest Expenses
$5,000
In addition, Larry's car (value =$15,000, cost = $20,000) was stolen during the year, and the insurance
reimbursement was only $7,000. He also had $2,000 of travel expenses related to his job that were not
reimbursed and $3,000 of federal income tax withheld from his salary.
He elects to treat his dividends as net investment income, so they are not subject to the special long-
term capital gains tax rates.

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