Mitch, who is single (age 28) and has no dependents, had activity for 2021 as follows: Salary $ 85,000 Dividends 5,000 Capital Gains 10,000 Capital Losses (15,000) Lottery Winnings 10,000 Mitch's expenditures for 2021 are as follows: Alimony (pre-2016 divorce) $ 20,000 Medical 8,000 Property Tax on Personal Residence 12,000 Charitable Contributions 3,800 Credit Card Payments (includes interest expense of $2,000) 8,500 What is the amount of Mitch's itemized deductions for 2021? 16,025 32,300 23,800 18,025

Mitch, who is single (age 28) and has no dependents, had activity for 2021 as follows: Salary $ 85,000 Dividends 5,000 Capital Gains 10,000 Capital Losses (15,000) Lottery Winnings 10,000 Mitch's expenditures for 2021 are as follows: Alimony (pre-2016 divorce) $ 20,000 Medical 8,000 Property Tax on Personal Residence 12,000 Charitable Contributions 3,800 Credit Card Payments (includes interest expense of $2,000) 8,500 What is the amount of Mitch's itemized deductions for 2021? 16,025 32,300 23,800 18,025

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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Sam, a taxpayer age 45, has the following expenses that he wants to include as itemized deductions for the year. His adjusted gross income is $50,000. What is the total itemized deduction he can take? (Show all work.) Medical expenses $4,500 Home mortgage interest $8,000 Credit card interest $450 Charitable contributions $1,500 State property taxes $2,400 Job-related expenses $1,900
John, age 40, is single and has the following income and expenses for 2020: Salary $170,000 Net rental income $7,200 Dividend income (qualified) $4,000 Interest from TD bank $65 Interest from City of Phila bonds $1,200 Loss on sale of section 1244 stock purchased directly from the Corporation $40,000. Alimony payment (divorce finalized December 30, 2018) $12,000. Loss on personal auto as a result of an auto accident $2,500 Contribution to traditional IRA $5,000 Charitable contributions $750 Mortgage interest on personal residence $12,000 Real estate taxes $4,500 State income taxes $5,219 Parking ticket (occurred during work related meeting) $100. Medical expenses (not reimbursed) $4.980. Calculate John’s AGI, taxable income and tax liability for 2020.
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.
Thomas, a calendar year cash basis taxpayer, has the following transactions: Salary from job $50,000 Alimony paid to ex-wife (divorce after 2018) 9,000 Medical expenses 4,500 Charitable contributions 2,000 Based on this information, Thomas has: AGI of $34,500. AGI of $41,000. AGI of $50,000. Medical expense deduction of $3,075. None of the above.
Jerry is single, age 60, and had adjusted gross income of $120,000 in 2022. His deductible expenses were as follows: Alimony(divorce finalized in 2017) Student loan interest paid Contribution to a traditional IRA State income taxes paid Interest on home mortgage Real estate taxes paid Property tax (Car) $20,000 2,500 5,500 5,500 8,500 7,000 400 What is Jerry's total allowable itemized deductions in 2022?
Lou had the following transactions for 2020: Salary $ 80,000 Alimony paid (divorce final in 2016) (4,000) Recovery from car accident— Personal injury damages $40,000 Punitive damages 70,000 110,000 Gift from parents 20,000 Property sales— Loss on sale of boat (used for pleasure and owned 4 years) ($4,000) Gain on sale of GE stock (held for 10 months as an investment) 4,000 (–0–) What is Maya’s AGI for 2020?
. Chee, single, age 40, had the following income and expenses during 2018: Income Salary $43,000 Rental of vacation home (rented 60 days, used personally 60 days, vacant 245 days) 4,000 Municipal bond interest 2,000 Dividend from General Electric 400 Expenses Interest on home mortgage 8,400 Interest on vacation home 4,758 Interest on loan used to buy municipal bonds 3,100 Property tax on home 2,200 Property tax on vacation home 1,098 State income tax 3,300 State sales tax 900 Charitable contributions 1,100 Tax return preparation fee 300 Utilities and maintenance on vacation home 2,600 Depreciation on rental portion of vacation home 3,500 Calculate Chee’s taxable income for the year. If Chee has any options, choose the method that maximizes his deductions.
Mr. and Mrs. Bachman, both age 65, file a joint return. In 2021, they have wages of $30,000, dividends of $6,200, and municipal bond interest of $3,000, and they received $10,300 for the sale of stock that cost $4,000 in 1992. They made a $3,000 contribution to their Roth IRA, paid $4,100 in deductible mortgage interest and real estate taxes, and made a $2,500 charitable contribution. What is their gross income, adjusted gross income, and taxable income?
During 2018, Iona Carr got divorced. In 2023, she presents the following information: Wages earned of $61,382 Alimony received of $9,600 Lawsuit settlement proceeds for personal injuries suffered of $18,000 Interest from a state municipal bonds of $46 Dividends received of $5,510, of which $4,050 were qualified dividends If there are no other relevant transactions, what is Iona Carr's 2023 adjusted gross income?
This year Diane intends to file a married-joint return. Diane received $179,700 of salary and paid $8,350 of interest on loans used to pay qualified tuition costs for her dependent daughter, Deb. This year Diane has also paid moving expenses of $5,100 and $29,400 of alimony to her ex-spouse, Jack, who she divorced in 2012. Note: Round your intermediate calculations and final answer to the nearest whole dollar amount. a. What is Diane's adjusted gross income? b. Suppose that Diane also reported income of $12,850 from a half share of profits from a partnership. Disregard any potential self-employment taxes on this income. What AGI would Diane report under these circumstances?
Malcolm and Megan Johnson are both over age 65, married and are filing a joint tax return for 2020. The joint Social Security is 644-47-7833. The couple has AGI of $ 28,108 for 2020 and provided the following information all which can be verified for 2020: Medical related expenses: Medical insurance premiums $ 1,200 Premiums in insurance policy that pays $100 per day for each day that Megan is hospitalized 400 Medical care and lodging 80 Hospital bills 2,200 Doctor bills 750 Dentist bills 240 Prescription drugs and medicines 360 Over-the-counter medicines 510 Marriage counseling 400 The couple drove 90 miles for medial transportation and their insurance reimbursed them $850 for the above expenses. Taxes related expenses: Megan’s employer withheld State income tax $ 3,400 Megan paid additional state income tax for 2019 600 Real estate taxes on home 2,100 Personal property taxes based on home value 130 State gasoline taxes 80 General sales tax for the year 1,200 Federal income taxes…
Dyson (48 years old) owns a traditional IRA with a current balance of $50,900. The balance consists of $30,600 of deductible contributions and $20,300 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 $50,900 balance of his traditional IRA in 2022. He retains $12,800 to pay tax on the distribution and he contributes $38,100 to a Roth IRA. What amount of income tax and penalty must Tyson pay on this series of transactions?