Will they qualify for any gain exclusions? If so, explain why. If not, explain why
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Daniel Jackson bought a home in 2010, before he married his wife Sarah. In 2020, Daniel and Sarah are equired to move due to Sarah’s new position she was offered recently. Daniel bought the home for 250,000 and it is being sold for 700,000 (it has had some upgrades). Daniel is self-employed so this won’t
be a problem for him. Sarah and Daniel were married 8 years ago. During his ownership, Daniel had a home office, where he worked form time to time.
As a part of the sale, these are the required known attributes:
• Sales Contract Price: 700,000
• Expenses of the sale: 57,000
• Purchase price: 250,000
•
1. Will they qualify for any gain exclusions? If so, explain why. If not, explain why
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- Amanda purchased a home for $500,000 in 2016. She paid $100,000 cash and borrowed the remaining $400,000. This is Amanda's only residence. Assume that in year 2023, when the home had appreciated to $750,000 and the remaining mortgage was $300,000, interest rates declined and Amanda refinanced her home. She borrowed $500,000 at the time of the refinancing, paid off the first mortgage, and used the remainder for purposes unrelated to the home. What is her total amount of acquisition indebtedness for the purposes of determining the deduction for home mortgage interest? (Assume not married filing separately.)Ashley Panda lives at 1310 Meadow Lane, Wayne, OH 43466, and her Social Security number is 123-45-6777. Ashley is single and has a 20-year-old son, Bill. His Social Security number is 111-11-1112. Bill lives with Ashley, and she fully supports him. Bill spent 2022 traveling in Europe and was not a college student. He had gross income of $4,655 in 2022. Bill paid $4,000 of lodging expenses that Ashley reimbursed after they were fully documented. Ashley paid the $4,000 to Bill using a check from her sole proprietorship. That amount is not included in the items listed below. Ashley had substantial health problems during 2022, and many of her expenses were not reimbursed by her health insurance. Ashley owns Panda Enterprises, LLC (98-7654321), a data processing service that she reports as a sole proprietorship. Her business is located at 456 Hill Street, Wayne, OH 43466. The business activity code is 514210. Her 2022 Form 1040, Schedule C for Panda Enterprises shows revenues of $315,000,…Brian purchased a block of land in June 1987 for $110,000. At the time that he acquired the land he did not anticipate selling it in the near future. He purchased and held the land because he considered that the land represented a safe investment for his money and that generally land prices went up with inflation. Brian sold the land for $250,000 in the current income year. Which of the following statements about Brian is most correct? a. The amount is not ordinary income but may be assessed under the capital gains provisions. b. The entire $250,000 is ordinary income. c. Section 15-15 ITAA97 will apply to make the amount of $140,000 assessable income. d. Section 25A ITAA36 will apply to make the amount of $140,000 assessable income.
- Taryn would like to open a new business as an interior designer, to funds her ambition she sold some of thefollowing assets:1. Antique Painting that was given to Taryn by her father 5 years ago. Taryn’s father bought it on 20 August1984 for $2,500. Taryn sold it on 1’st June 2020 for $25,0002. Taryn sold her car (Toyota Corolla) for the amount of $12,000 on 20’th May 2020, she bought on 1’stJanuary 2015 for the amount of $20,0003. Taryn sold her Harry Potter’s collection for the amount of $1,500 on 4’th January 2020, she bought itsecond hand on 10’th October 2018 for $350.4. Taryn sold her gold necklace for $2,000 on 20’th March 2020, she bought it for $1,200 on 8’th August20185. Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it on December 1994 for $1,500Advise the Capital Gain Tax Consequences for the above transactions, please have a look at the matrix below on how to answer the questionQUESTION 2: Capital gain tax consequences WeightingIdentification of material…tim is living with his spouse in California when he finds out that his wife is having an affair. Tim packs his bags and leaves the state to move to Indiana, intending on filing separately. Tim and his spouse cohabitated until June. He earned $50,000 during the year, $30,000 of which was in California. She earned $60,000 during the year. How much wage income does Tim have on his California return and from whom? (Remember, the return is being filed separately) He has $50,000 in state wages from his pay only, since he's no longer in a community property state. He has $45,000 in state wages, with $15,000 from half of his state-sourced pay and $30,000 from her half of pay. He has $55,000 in state wages, with $25,000 from half of his total pay and $30,000 from her half of pay. He has $30,000 in state wages from his state-sourced pay.Taryn would like to open a new business as an interior designer, to funds her ambition she sold some of thefollowing assets:1. Antique Painting that was given to Taryn by her father 5 years ago. Taryn’s father bought it on 20 August1984 for $2,500. Taryn sold it on 1’st June 2020 for $25,0002. Taryn sold her car (Toyota Corolla) for the amount of $12,000 on 20’th May 2020, she bought on 1’stJanuary 2015 for the amount of $20,0003. Taryn sold her Harry Potter’s collection for the amount of $1,500 on 4’th January 2020, she bought itsecond hand on 10’th October 2018 for $350.4. Taryn sold her gold necklace for $2,000 on 20’th March 2020, she bought it for $1,200 on 8’th August20185. Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it on December 1994 for $1500 Q. Identification and analysis of legal issues / legal question and relevant taxation law for each case and Accurate conclusions are reached from each case. QThorough application of ITAA 1997 to material facts.
- Nancy Kapiolani lives in a duplex that she owns at 1218 Park Ave S., Tacoma, WA 98447. Nancy rents one-half of her duplex and lives in the other half. In 2023, her existing tenant’s lease expires and the tenant moves out. The tenant paid $2,500 in rent during 2023. Nancy had collected first and last months’ rent from the tenant in 2022. Due to the condition of the unit, Nancy keeps $200 of the security deposit to make repairs. Her new tenant moves in and pays $1,000 per month for a one-year lease starting July 1, 2023. The new tenant is also required to pay Nancy first and last months’ rent plus a $500 security deposit. The unit is rented for 365 days during 2023. Nancy’s basis for depreciation on the rental portion is $120,000, and she uses straight-line depreciation with a 27.5 year useful life. Repairs to the rental half of the unit are $400 (including the $200 from the security deposit). On the whole duplex, real estate taxes are $2,200, interest on the mortgage is $3,400,…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…After you determine the Amount Realized, Type and amount of Basis, and Gain or Loss of the following, explain what will be included in the Taxpayers income and why: Lois and Peter bought a home in Rhode Island when they got married in 1985 for 100,000. In December 2006 Peter got a job in Los Angeles to develop a cartoon sitcom. He and Lois moved out of their home and rented it out until 2009. From January 2009 through October 2009 there were no tenants, and Lois and Peter moved back in October 2009. April 2011 they listed their house for sale. They sold the house for 500,000.
- • Aiden and Sophia are married and they have always filed Married Filing Jointly.• Aiden died May 5, 2020 at the age of 58. Sophia, age 56, has not remarried.• Aiden earned $5,000 in wages and Sophia earned $51,000 in wages.• Sophia paid all the cost of keeping up a home and provided all the support for theirtwo children, Mia and Oliver, who lived with them all year.• Mia is 11 years old and Oliver is 15 years old.• Sophia does not have enough deductions to itemize, but she did make a $500 cashcharitable contribution to a qualified charitable organization in tax year 2020.• Aiden, Sophia, Mia, and Oliver are all U.S. citizens with valid Social Securitynumbers. 5. What is most advantageous filing status allowable that Sophia can claim on the taxreturn for tax year 2020?a. Singleb. Head of Householdc. Qualifying Widow(er)d. Married Filing Jointly6. What amount can Sophia deduct as a charitable contribution adjustment?a. $0b. $250c. $300d. $500I already tried 5,980, but its incorrect Interview Notes Chloe, age 48, divorced her husband in 2017. Chloe's 4 year old grandson, Marcus, has been living with her since his parents were incarcerated in August 2019. Chloe provided all the support for Marcus and all the costs of keeping up their home in 2022. Marcus' parents had no income for 2022 and will not claim Marcus. Chloe worked full time and earned $53,000. She received no other income in 2022. Marcus attends daycare while Chloe works. Chloe received a statement from the daycare provider showing she paid $5,980 for Marcus' care for the year. She did not pay any 2021 expenses in 2022. Chloe and Marcus are both U.S. citizens, lived in the United States all year, and have valid Social Security numbers. No one else lives in the household with them. 5. What amount can Chloe claim as qualified dependent care expenses on Form 2441? I $3,000 b. $5,980 c. $6,000 d. $8,000Taryn would like to open a new business as an interior designer, to funds her ambition she sold some of thefollowing assets:1. Antique Painting that was given to Taryn by her father 5 years ago. Taryn’s father bought it on 20 August1984 for $2,500. Taryn sold it on 1’st June 2020 for $25,0002. Taryn sold her car (Toyota Corolla) for the amount of $12,000 on 20’th May 2020, she bought on 1’stJanuary 2015 for the amount of $20,0003. Taryn sold her Harry Potter’s collection for the amount of $1,500 on 4’th January 2020, she bought itsecond hand on 10’th October 2018 for $350.4. Taryn sold her gold necklace for $2,000 on 20’th March 2020, she bought it for $1,200 on 8’th August20185. Taryn sold a sculpture for $6,000 on 1 January 2020, she bought it on December 1994 Q. Identification and analysis of legal issues / legal question and relevant taxation law for each case and Accurate conclusions are reached from each case. QThorough application of ITAA 1997 to material facts.
