Margaret Lindley paid $15.100 of interest on her $301,000 acquisition debt for her home (fair market value of $501,000 $4,100 of interest on her $30100 home equity debt used to buy a new boat and cac$1,100 of credit card interest, and $3,100 of margin interest for the purchase of stock Assume that Margaret Lindley has $10,100 of interest income this year and no investiment expenses. How much of theinterest expense may she deduct this year?Multiple ChoiceOOO$23,400$22.300$19,200$1,200None of the choices are correct

Variables in the question:Interest on acquisition debt for home=$15100Interest on home equity…

Answered: Margaret Lindley paid $15.100 of…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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The executor of Rose Shield's estate listed the following properties (at fair value): $ 350,000 250,000 150,000 Cash Life insurance receivable Investments in stocks and bonds Rental property 100,000 180,000 Personal property Following are the transactions that occur in the months following the decedent's death: 1. Claims of $90,000 are made against the estate for various debts incurred before the decedent's death. 2. Interest of $22,000 is received from bonds held by the estate. Of this amount, $4,000 had been earned prior to death. 3. Ordinary repairs costing $11,000 are made to the rental property. 4. All debts ($90,000) are paid. 5. Stocks recorded in the estate at $21,000 are sold for $29,000 cash. 6. Rental income of $24,000 is collected. Of this amount, $7,000 had been earned prior to the decedent's death. 7. Cash of $7,000 is distributed to Jim Arness, an income beneficiary. 8. The proceeds from the life insurance policy are collected and the money is immediately distributed to…
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In the current year, Eva has net short-term capital losses of $3,000, a net long-term capital loss of $42,000, and taxable income from wages of $36,000. a. Calculate the amount of Estes' deduction for capital losses for the current year. b. Calculate the amount and nature (short-term or long-term) of his capital loss carryforward. c. For how many years may Eva carry the unused loss forward?
During the current year, Jean and Steve sold the following assets and made the following gains and losses. Capital asset. Capital gain/loss. Type A stock. $35,000. long 0/15/20% B stock. (8,000). short Antiques. 5,000. long 28% Rental home. 100,000. long 25% and 0/15/20% *40,000 of the gain is 25 percent gain from accumulated depreciation on the property. i)Complete the capital gains and losses netting process and determine the maximum tax rates applicable to the gains. ii) Given that Jean and Steve have taxable income of $450,000 before considering the sales above, what is their gross tax liability for 2021 assuming they file a joint return?
Dorothie paid the following amounts during the current year: Interest on her home mortgage (pre-12/16/17) $9,250 Service charges on her checking account 48 Credit card interest 168 Auto loan interest 675 Interest from a home equity line of credit (HELOC) 2,300 Interest from a loan used to purchase stock 1,600 Credit investigation fee for loan 75 Dorothie's residence has a fair market value of $250,000. The mortgage is secured by the home at the time of purchase and has a balance of $180,000. Dorothie used the same home to secure her HELOC with a balance of $50,000. Dorothie used the proceeds of her HELOC to pay for college and to buy a new car. Dorothie has $1,000 of net investment income. Compute Dorothie's interest deduction in the following scenarios: a. Calculate Dorothie's interest deduction (on Schedule A) for 2021. b. Same as part a, and Dorothie used the HELOC proceeds to add a new bedroom to her home. c. Same as part a, but Dorothie's home is valued at $1,200,000 and her…
Required Informatlon [The following information applies to the questions displayed below.] Javier and Anita Sanchez purchased a home on January 1 of year 1 for $1,000,000 by paying $200,000 down and borrowing the remaining $800,000 with a 6 percent loan secured by the home. The Sanchezes made interest-only payments on the loan in years 1 and 2. (Leave no answer blank. Enter zero if applicable.) c. Assume year 1 is 2020 and by the beginning of year 4, the Sanchezes have pald down the principal amount of the loan to $500,000. In year 4, they borrow an additional $100,000 through a loan secured by the home in order to finish their basement. The new loan carries a 7 percent interest rate and is termed a "home equity loan" by the lender. What amount of interest can the Sanchezes deduct on the $100,000 loan? Maximum deductible interest expense
Required Information [The following Information applies to the questions displayed below.] Rania contributed equipment worth $120,000, purchased 9 months ago for $136,500 cash and used In her sole proprietorship, to Sand Creek LLC in exchange for a 35 percent profits and capital Interest In the LLC. Rania agreed to guarantee all $10,200 of Sand Creek's accounts payable, but she did not guarantee any portion of the $60,000 nonrecourse mortgage securing Sand Creek's office building. Other than the accounts payable and mortgage, Sand Creek does not have any liabilities to other creditors. a. What is Rania's Initial tax basis in her LLC Interest? Tax basis
Margaret Lindley paid $15,190 of interest on her $301,900 acquisition debt for her home (fair market value of $501,900), $4,190 of interest on her $30,190 home-equity debt used to buy a new boat and car, $1,190 of credit card interest, and $3,190 of margin interest for the purchase of stock. Assume that Margaret Lindley has $10,190 of interest income this year and no investment expenses. How much of the interest expense may she deduct this year? $23,760 $22,570 $19,380 $18,380 None of the choices are correct.
Jennifer transferred land with an adjusted basis of $15,000 and a fair market value of $25,000 to ABC Corporation in return for all of its stock. Jennifer also received a $1,000 short-term note (boot). Please calculate the following for Jennifer. You must show your all of your work. 1) Her realized gain 2) Her recognized gain 3) Her basis in the stock 4) Her basis in the note
During the current year, Finn and Claire, a married couple who use the cash method of accounting purchased a principal residence for $325,000. They paid $39,000 down and financed the remaining $286,000 of the purchase price with a 30-year mortgage. At the closing, they also paid $350 for an appraisal, $425 for a title search, and 2.5 points representing additional interest over the term of the loan. At the end of the year, Finn and Claire received a statement from the mortgage company indicating that $11,500 of their total monthly payments made during the year represents interest and $1,100 is a reduction of the principal What is the total amount Finn and Claire may deduct in the current year arising from the purchase and ownership of their home? Finn and Claire may deduct . Part 2 b. What is the treatment of the other items that are not deductible? A. The other closing costs are added to the market value of the home. B. The other closing…
Barbara sells vacant land that was held for investment in her business for $274,000. The land had an adjusted basis of $57.540. The buyer has offered to pay for the land with $61,000 cash at the date of sale and then in three equal installments of $71,000 over the next three years beginning on January 1 of the next year. What is Barbara's realized and recognized gain in each year of the sale? Assume that adequate interest is paid in addition to the numbers shown above. Realized gain Recognized gain in year 1 Recognized gain in year 2 Recognized gain in year 3 Recognized gain in year 4 $ $ $ $ 216,460 45.457 48,190 48,190 48,190
For the current year, Sarah has salary of 50,000. In addition, she has the following capital transactions: Long-term capital gain (15%) 12,000 Short-term capital gain 8,000 Long-term capital loss (28%) (4,000) Short-term capital loss (10,000) What is her taxable income for the year? She has a short-term capital loss carry-over of 5,000 from the previous year. The standard deduction amount for her is 12,000

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