Individual Income Taxes
43rd Edition
ISBN: 9780357109731
Author: Hoffman
Publisher: CENGAGE LEARNING - CONSIGNMENT
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Chapter 10, Problem 25P
LO.2 For calendar year 2019, Jean was a self-employed consultant with no employees. She had $80,000 of net profit from consulting and paid $7,000 in medical insurance premiums on her policy covering 2019. How much of these premiums may Jean deduct as a deduction for AGI? How much may she deduct as an itemized deduction (subject to the AGI floor)?
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Chapter 10 Solutions
Individual Income Taxes
Ch. 10 - Prob. 1DQCh. 10 - Prob. 2DQCh. 10 - Prob. 3DQCh. 10 - Prob. 4DQCh. 10 - LO.2 David, a sole proprietor of a bookstore, pays...Ch. 10 - LO.2 Jayden, a calendar year taxpayer, paid 16,000...Ch. 10 - Prob. 7DQCh. 10 - Prob. 8DQCh. 10 - Prob. 9DQCh. 10 - Prob. 10DQ
Ch. 10 - LO.5 Thomas purchased a personal residence from...Ch. 10 - Prob. 12DQCh. 10 - Prob. 13DQCh. 10 - LO.6, 8 William, a high school teacher, earns...Ch. 10 - LO.2 Barbara incurred the following expenses...Ch. 10 - Prob. 16CECh. 10 - Prob. 17CECh. 10 - Prob. 18CECh. 10 - Prob. 19CECh. 10 - Prob. 20CECh. 10 - Prob. 21CECh. 10 - Prob. 22PCh. 10 - Prob. 23PCh. 10 - LO.2 Paul suffers from emphysema and severe...Ch. 10 - LO.2 For calendar year 2019, Jean was a...Ch. 10 - LO.2 During 2019, Susan incurred and paid the...Ch. 10 - In May, Rebeccas daughter, Isabella, sustained a...Ch. 10 - Prob. 28PCh. 10 - Prob. 29PCh. 10 - Prob. 30PCh. 10 - Prob. 31PCh. 10 - Prob. 32PCh. 10 - Prob. 33PCh. 10 - Prob. 34PCh. 10 - On December 27, 2019, Roberta purchased four...Ch. 10 - Prob. 36PCh. 10 - Prob. 37PCh. 10 - Prob. 38PCh. 10 - LO.2, 3, 4, 5, 6, 7 Linda, who files as a single...Ch. 10 - LO.2, 3, 4, 5, 6, 7 For calendar year 2019, Stuart...Ch. 10 - Prob. 41CPCh. 10 - Marcia, a shareholder in a corporation with stores...Ch. 10 - Prob. 4RPCh. 10 - Prob. 1CPACh. 10 - Prob. 2CPACh. 10 - Prob. 3CPACh. 10 - Kurstie received a 800 state income tax refund...Ch. 10 - Which of the following would preclude a taxpayer...Ch. 10 - Prob. 6CPA
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- In 2019, Lou has a salary of $53,300 from her job. She also has interest income of $1,600 and dividend income of $ 400. Lou is single and has no dependents. During the year, Lou sold silver coins held as an investment for a $7,000 loss. Calculate the following amounts for Lou: Adjusted gross income $ ____________________ Standard deduction $ ____________________ Taxable income $ ____________________arrow_forwardJoy incurs the following expenses in her business. When can she deduct the expenses if she uses the accrual method of accounting? the cash method? a. Joy rents an office building for 750 a month. Because of a cash flow problem, she is unable to pay the rent for November and December 2019. On January 5, 2019, Joy pays the 2,250 rent due for November, December, and January. b. Joy borrows 60,000 on a 1-year note on October 1, 2019. To get the loan, she has to prepay 6,200 in interest. c. Joy owes employees accrued wages totaling 20,000 as of December 31, 2019. The accrued wages are paid in the regular payroll on January 5, 2020. d. Joy purchases 2,400 worth of supplies from a local vendor. The supplies are delivered on January 29, 2019. They are fully used up on December 30, 2019. Because of unusual circumstances, a bill for the supplies arrives from the vendor on January 10, 2020, and is promptly paid. e. While at a trade convention, Joy purchases some pens and paperweights to send out as holiday gifts to her clients. She charges the 700 cost to her credit card in December 2019. She pays the credit card bill in January 2020.arrow_forwardFreda is a cash basis taxpayer. In 2019, she negotiated her salary for 2020. Her employer offered to pay her 21,000 per month in 2020 for a total of 252,000. Freda countered that she would accept 10,000 each month for the 12 months in 2020 and the remaining 132,000 in January 2021. The employer accepted Fredas terms for 2020 and 2021. a. Did Freda actually or constructively receive 252,000 in 2020? b. What could explain Fredas willingness to spread her salary over a longer period of time? c. In December 2020, after Freda had earned the right to collect the 132,000 in 2020, the employer offered 133,000 to Freda at that time, rather than 132,000 in January 2021. The employer wanted to make the early payment so as to deduct the expense in 2020. Freda rejected the employers offer. Was Freda in constructive receipt of the income in 2020? Explain.arrow_forward
- Karen, 28 years old and a single taxpayer, has a salary of $33,000 and rental income of $33,000 for the 2019 calendar tax year. Karen is covered by a pension through her employer. What is the maximum amount that Karen may deduct for contributions to her IRA for 2019? $__________________________ If Karen is a calendar year taxpayer and files her tax return on August 15, what is the last date on which she can make her contribution to the IRA and deduct it for 2019? $__________________________arrow_forwardKana is a single wage earner with no dependents and taxable income of $205,000 in 2019. Her 2018 taxable income was $155,000 and tax liability was $31,490. Calculate the following (note: this question requires the use of the tax tables in Appendix A): Kana's 2019 income tax liability $_______________ Kana's minimum required 2019 annual payment necessary to avoid penalty $______________arrow_forwardXinran, who is married and files a joint return, owns a grocery store. In 2019 his gross sales were 276,000, and operating expenses were 320,000. Other In 2020, Xinran provides the following information: The 2019 married filing jointly standard deduction is 24,400; Xinrans itemized deductions will exceed the 2020 standard deduction (after adjustment for inflation). The medical expense AGI floor is 10% in 2019. a. What is Xinrans 2019 NOL? b. Determine Xinrans taxable income for 2020.arrow_forward
- During the 2019 tax year, Brian, a single taxpayer, received $ 7,400 in Social Security benefits. His adjusted gross income for the year was $14,500 (not including the Social Security benefits) and he received $ 30,000 in tax-exempt interest income and has no for-AGI deductions, Calculate the amount of the Social Security benefits that Brian must include in his gross income for 2019. SIMPIFIED TAXABLE SOCIAL SECURITY WORKSHEET (FOR MOST PEOPLE) 1. Enter the total amount of Social Security income. 2. Enter one-half of line 1 3. Enter the total of taxable income items on Form 1040 except Social Security income. 4. Enter the amount of tax-exempt interest income. 5. Add lines 2,3, and 4 6. Enter all adjustments for AGl except for student loan interest, the domestic production activities deduction, and the tuition and fees deduction. 7. Subtract line 6 from line 5 . If zero or less, stop here, none of the Social Security benefits are taxable. 8. Enter $ 25,0001 $ 32,000 if married filing jointly; 0 if married filing separately and living with spouse at any time during the year) 9. Subtract line 8 from line 7 . If zero or less, enter -0 - Note: If line 9 is zero or less, stop here; none of your benefits are faxable. Otherwise, go on to line 10 10. Enter $ 9,0001 $12,000 if married filing jointly; 0 if married filing separately and living with spouse at any time during the year) 11. Subtract line 10 from line 9. If zero or less, enter -0 -. 12. Enter the smaller of line 9 or line 10 . 13. Enter one-half of line 12 14. Enter the smaller of line 2 or line 13 . 15. Multiply line 11 by 85 (. 85 ). If line 11 is zero, enter -0 -. 16. Add lines 14 and 15 17. Multiply line 1 by 85(.85) 18. Taxable benefits. Enter the smaller of line 16 or line 17 . 1.____________ 2.____________ 3.____________ 4.____________ 5.____________ 6.____________ 7.____________ 8.____________ 9.____________ 10.____________ 11.____________ 12.____________ 13.____________ 14.____________ 15.____________ 16.____________ 17.____________ 18.____________arrow_forwardLO.2 During 2019, Susan incurred and paid the following expenses for Beth (her daughter), Ed (her father), and herself: Beth qualifies as Susans dependent, and Ed would also qualify except that he receives 7,400 of taxable retirement benefits from his former employer. Beths psychiatrist recommended Red River Academy because of its small classes and specialized psychiatric treatment program that is needed to treat Beths illness. Ed, who is a paraplegic and diabetic, entered Heartland in October. Heartland offers the type of care that he requires. Upon the recommendation of a physician, Susan has an air filtration system installed in her personal residence. She suffers from severe allergies. In connection with this equipment, Susan incurs and pays the following amounts during the year: The system has an estimated useful life of 10 years. The appraisal was to determine the value of Susans residence with and without the system. The appraisal states that the system increased the value of Susans residence by 2,200. Ignoring the AGI floor, what is the total of Susans expenses that qualifies for the medical expense deduction?arrow_forwardClassify each of the following expenditures paid in 2019 as a deduction for AGI, a deduction from AGI, or not deductible: a. Roberto gives cash to his father as a birthday gift. b. Sandra gives cash to her church. c. Albert pays Dr. Dafashy for medical services rendered. d. Mia pays alimony to Bill. e. Rex, who is self-employed, contributes to his pension plan. f. Bonita pays expenses associated with her rental property. g. Lu, who operates a sole proprietorship, takes a client to dinner to discuss new business.arrow_forward
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