with a fairly good income but requires him to hire a caregiver for his daughters, ages 3 and 5, nearly This requires him to use in home childcare services that consume a large portion of his income Since the Dutton na small apartment, this arrangement has been very inconvenient. This problem was magnified when John was orced to work remotely, from home, for most of the year due to the Covid-19 pandemic though John has saved some money for his daughters' education and for his retirement, he has not sought to nvestments that offer tax benefits Overall, he needs to look at several aspects of his tax planning activities to trategies that will best serve his curent and future financial needs phn has assembled the following information for the current tax year mswer the three questions that follow pertaining to this case $94,500 Earnings from wages Interest earned on Savings account & GIC $3,200 Capital gains on investments $3,800 Total value of non refundable tax credits $2,750

with a fairly good income but requires him to hire a caregiver for his daughters, ages 3 and 5, nearly This requires him to use in home childcare services that consume a large portion of his income Since the Dutton na small apartment, this arrangement has been very inconvenient. This problem was magnified when John was orced to work remotely, from home, for most of the year due to the Covid-19 pandemic though John has saved some money for his daughters' education and for his retirement, he has not sought to nvestments that offer tax benefits Overall, he needs to look at several aspects of his tax planning activities to trategies that will best serve his curent and future financial needs phn has assembled the following information for the current tax year mswer the three questions that follow pertaining to this case $94,500 Earnings from wages Interest earned on Savings account & GIC $3,200 Capital gains on investments $3,800 Total value of non refundable tax credits $2,750

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

jam is single and has to relocate in order to begin a new job. She travels 400 kilometers closer to her new workplace. It will take her one day to complete the journey. She pays for motels in her new location for ten days while she waits for her apartment, which costs $100 per day ($1,000 total). She pays a mover $1,200 to transport her belongings. What is the maximum moving expense deduction jam may claim, provided she has enough income in the new location?
Amy is a business owner who purchased a policy of business insurance providing 1,000,000 limits for 1st party coverages. Covid and inflation has cut into her profits so she chose to purchase an actual cash value 1 party coverage limit as opposed to replacement cost. Unfortunately she had a fire and all of the contents of her office building were destroyed (computers, copying machine, phones etc.) Amy's office contents were quite old and had a value at the time of the fire of $550,000. The cost to replace these items, however, was $975,000. Amy is glad she purchased 1,000,000 limits thinking she will be able to buy new contents to replace the destroyed ones without having to spend any $. After all her limits are less than the cost to replace. Is she correct? Explain.
Tom A., a married taxpayer with a small child has decided to begin mining cryptocurrency out of his home. He still has a full time job. His wife is not involved in any way in his crypto mining activities. He has decided to use a small spare bedroom to house the electronic equipment needed. He has spent $40,000 on the computer equipment, and has had a separate electrical system installed (cost $5,000). He also has installed separate air conditioning equipment $5,000. His electrical for this activity alone was $$7,000. He made $35,000 in gross revenue from hard forks with air drops. He continues to work his full time job at 45+ hours per week with an annual income of $250,000 (assume standard deduction). He has attended several online seminars about cryptocurrency and plans to continue. He also created an LLC and operates his crypto activities through the one owner LLC. a. Will this activity be treated as a regular schedule C activity or a hobby? b. If Tom's activities are treated as a…
Bobby is 35 and single. He works for ExxonMobil in their offices in Dallas, Texas. Bobby has an Aetna PPO with a $2,500 individual deductible, co-insurance in network is 80/20. His Max out of pocket is $10,500 per year. On the way to a meeting at the office, Bobby trip and fell down the stairs. He suffered significant injuries and had to be airlifted to the hospital, He was in a coma for 3 days and had to have multiple surgeries. Fortunately, he has fully recovered. All-in-all his medical bills added up to $82,345 How much of Bobby's medical expenses will Aetna cover? (Use a positive number and round to the nearest dollar)
Bernadette suffers from multiple sclerosis and has great difficulty climbing stairs. Upon the recommendation of her physician, she has an elevator chair-system installed in her personal residence. In connection with the system, Bernadette incurs and pays the following amounts during the current year: Doctor and hospital bills $6,700 Elevator chair-system 19,500 Installation charge for elevator chair-system 1,500 Cost of certified appraisal 500 In addition, Bernadette pays $1,350 for prescribed medicines. The system has an estimated useful life of 25 years. The appraisal was to determine the value of Bernadette's residence with and without the system. The appraisal states that her residence was worth $224,000 before the system was installed and $240,000 after the installation. Bernadette's AGI for the year was $83,000. What is the total of her qualifying medical expenses for 2018?$ What is her medical expense deduction for the current year?$
Sophie Lopez is a 72-year-old widow who has recently been diagnosed with Alzheimer’s disease. She has limited financial assets of her own and has been living with her daughter Felicity for two years. Her income is $850a month in Social Security survivor’s benefits. Felicity wants to make surethat her mother will be taken care of if Felicity should die prematurely. Felicity, 40, is single and earns $55,000 a year as a human resources manager for a small manufacturing firm. She owns a condo with a current market value of $100,000 and has a $70,000 mortgage. Other debtsinclude a $5,000 auto loan and $500 in various credit card balances. Her 401(k) plan has a current balance of $24,500, and she keeps $7,500 in a money market account for emergencies. After talking with her mother’s doctor, Felicity believes that her mother will be able to continue living independently for another two to three years. She estimates that her mother would need about $2,000 a month to cover her living…
Donna is 84 years old and needs to move to an assisted living care facility. Her health is not great, so you are using a life expectancy of 6 years. She has investments totalling $200,000 in mostly low yielding savings accounts. Her pension income amounts to $3,000 per month, received at the beginning of each month (this excludes any income from her investments). Donna has found several places to live but the monthly cost is quite high, and she doesn't know if she can afford any of them. Donna wants to know the maximum amount she can afford to spend per month (payment at beginning of month) if she has no other monthly expenses. Assume you can invest her $200,000 and earn 5% compounded monthly.
François, an insurance agent with Safe Life Insurance Co., meets with Thomas and Annie Fortin to assess their life insurance needs. The Fortins are a single-income family with two children: a two-year- old and a four-year-old. Annie, the sole income earner, is an anesthetist with a hectic and unpredictable work schedule at the hospital Thomas is the primary caregiver and stay-at-home parent. He does not earn an income. Annie's income is sufficient to cover the family's savings and expenses. During the meeting, François gathers relevant information to assess the loss of income that would result from Annie's death. Should François also assess the financial impact that would result from Thomas's death? Select one correct answer from the list 1. Yes, Thomas's sense of self-worth would suffer if he was not included in the analysis Yes, Thomas' death may have a financial impact on Annie's ability to keep earning a sufficient income. No, Annie's income already covers the family's savings and…
8. Which of the following best illustrates a moral hazard? . Because he has plenty of insurance, Cameron does not take steps to make his property safe when most of his neighbors have been vandalized or burglarized. . The coverage on Carl's residence has increased each year, but the value of his hom has declined due to neighborhood influences and his home's state of disrepair. . Chet purchases actual cash value, rather than replacement, coverage in order to save money on his homeowners insurance premiums. . When Clarke's empty property is vandalized, he moves furniture into the house and damages it in order to submit a larger claim.
BeBe had a tough year! She had two different unfortunate casualties during the year. First, her car was in an accident. Her car had a value of $20,000. Her basis (her cost) had been $30,000. After the accident, the value was reduced to only $10,000. Her insurance company reimbursed her for $3,000 only. Second, she had a separate free-standing storage she on her property, which burned down. The shed had a fair market value of $4,000, and a cost adjusted basis to BeBe of $3,500. Her insurance company reimbursed her $3,000 for her loss. If BeBe's adjusted gross income is $60,000, what is her deductible casualty loss, if any?
Jane is a roofing contractor. Jane's friend needed a new roof but did not have the cash to pay. Jane's friend instead paid with a used truck that Jane could use in her roofing business. The truck had originallycost the friend $17,500 but it was gently used and only worth $6,000. Jane did not actually need the truck and ended up selling it to a used car dealer for $5,200 a few months later. Explain what amount of gross income Jane must recognize as a result of the truck payment and why.
Please answer within 30 minutes. Thank you very much.