On January 1, 2019, Charles Jamison borrows $40,000 from his father to open a business.Charles is the beneficiary of a trust created by his aunt from which he will receive $25,000on January 1, 2029. He signs an agreement to make this amount payable to his father and,further, to pay his father equal annual amounts from January 1, 2020, to January 1, 2028,inclusive, in retirement of the debt. Interest is 12% per year. What are the annualpayments?

The objective of the question is to calculate the annual payments Charles needs to make to his…

Answered: On January 1, 2019, Charles Jamison…

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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An individual died on June 30, 2020. On that date, they owned marketable securities worth $100,000 and an adjusted cost base (ACB) of $40,000; and an unmatured registered retirement savings plan (RRSP) of $250,000. Up to the date of death, they received interest income of $8,000 and salary income of $35,000. By the terms of the will the securities were given to the son and the RRSP to the spouse. How much would be reported in the deceased’s income for 2020?
Liz had AGI of $130,000 in 2020. She donated Bluebird Corporation stock with a basis of $10,000 to a qualified charitable organization on July 5, 2020. What is the amount of Liz’s deduction assuming that she purchased the stock on December 3, 2019, and the stock had a fair market value of $17,000 when she made the donation? Assume the same facts as in part (a), except that Liz purchased the stock on July 1, 2017. Assume the same facts as in part (a), except that the stock had a fair market value of $7,500 (rather than $17,000) when Liz donated it to the charity.
Jim has elected to treat transfers (on behalf of his son) made by him during tax year 2022 to a qualified state tuition program as made ratably over 5 years. His total contribution to this plan during 2022 is $80,000. He makes no other transfers during tax year 2022. What amount will be treated as a taxable gift in tax year 2022?
In 2022, K, age 12, received a gift of stocks and bonds from K's uncle Hal. K had interest income of $900, dividend income of $4,000, from the stocks and bonds during 2022 and also earned $1,000 from walking dogs in the neighborhood. K's parents have taxable income of $80,000 and file a joint return. K had no expenses and files K's own return. What is K's a. Gross Income b. Net Unearned Income c. Tax Due
In 2019, Joshua gave $12,500 worth of Microsoft stock to his son. In 2020, the Microsoft shares were worth $22,500. What was the gift tax in 2019? The gift tax exemption in 2019 was the same as in 2020. Gift tax
Walter owns a whole-life insurance policy worth $55,800 that directs the insurance company to pay the beneficiary $251,000 on Walter's death. Walter pays the annual premiums and has the power to designate the beneficiary of the policy (it is currently his son, James). Required: What value of the policy, if any, will be included in Walter's estate upon his death? Value of policy
In September 2018, Bill and Linda, a married couple with $50,000 gross income, cashed qualified Series EE U.S. Savings Bonds which they had purchased in 2011. The proceeds were used to help pay for their son's 2018 college tuition. They received gross proceeds of $3,500, representing principal of $3,000 and interest of $500. The qualified higher education expenses they paid in 2018 totaled $2,100. Their modified adjusted gross income for the year was $20,000. How much of the $500 interest can Bill and Linda exclude from gross income in 2018?
In June of 2019, Kevin inherits stock worth $125,000. During the year, he collects $5,600 in dividends from the stock. How much of these amounts, if any, should Kevin include in his gross income for 2019?
On November 15, 2019, Tim, a cash basis taxpayer, gave his Daughter Nancy 1000 shares of JP Morgan common stock, which Tim purchased on June 30, 2015 for $60,000. On the date of the gift the stock was selling on the NY Stock Exchange for $46 per share. On December 03, 2019, the corporation declared a 1 for 1 stock dividend payable on December 10, 2019, to shareholders of record as of November 22, 2019. On January 17, 2020, Nancy sold 1,500 shares of JP Morgan common stock that she received from her father and from the stock dividend for $18 per share. a) What is Nancy’s recognized gain or loss on the sale of the 1,500 shares on January 17, 2020? b) What is Nancy’s total basis in the remaining shares? Explain your answer and show all calculation.
Geoff purchased a life annuity for $4,800 that will provide him $100 monthly payments for as long as he lives. Based on IRS tables, Geoff’s life expectancy is 240 months. How much of the first $100 payment will Geoff include in his gross income?
Marcy Tucker received the following items this year. Determine to what extent each item is included in her AGI. Assume the taxable year is 2022. Required: A $29,250 cash gift from her parents. A $670 cash award from the local Chamber of Commerce for her winning entry in a contest to name a new public park. $8,850 alimony from her former husband, which he paid under the terms of their 2011 divorce decree. $117,000 cash inheritance from her grandfather.
Jessica purchased a home on January 1, 2022, for $500,000 by making a down payment of $200,000 and financing the remaining $300,000 with a loan, secured by the residence, at 6 percent. During 2022 and 2023, Jessica made interest-only payments on this loan of $18,000 (each year). On July 1, 2022, when her home was worth $500,000, Jessica borrowed an additional $125,000 secured by the home at an interest rate of 8 percent. During 2022, she made interest-only payments on the second loan in the amount of $5,000. During 2023, she made interest-only payments on the second loan in the amount of $10,000. What is the maximum amount of the $28,000 interest expense Jessica paid during 2023 that she may deduct as an itemized deduction if she used the proceeds of the second loan to finish the basement in her home and landscape her yard? (Assume not married filing separately.) multiple choice: Multiple Choice: a. $0 b. $10,000 c. $26,353 d. $26,000 e. $28,000

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