Mr. & Mrs. G a middle-aged couple with two children, Mr. R, age 13, and Mr. S, age 11 whom they adopted this year. They have an extensive retirement portfolio invested primarily in growth-oriented mutual funds. Their annual investment income is only $500, none of which is attributable to capital gains. Mr. A works in the banking industry and receives an annual income of $32,500.while Mrs. A, who owns the only travel agency in town, makes about $40,000 a year. The G’s family give extensively to charities. Character in the case: Mr. A and Mrs. A Adequate information: Gross annual income is $40,000. Medical expenses are $3,600. Braces expense is $1,500. Real estate taxes are $900. State taxes withheld and hold is $4,000. Mortgage interest expense is $7,200. Charitable contribution is $3,400. Unreimbursed business expenses are $2,300. Qualified adoption expenses are $6,700. To determine: Mrs. A’s social security and Medicare taxes that is to be deductible for the year 2014.

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Chapter 4, Problem 1DC2

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Case summary:

Mr. & Mrs. G a middle-aged couple with two children, Mr. R, age 13, and Mr. S, age 11 whom they adopted this year. They have an extensive retirement portfolio invested primarily in growth-oriented mutual funds. Their annual investment income is only $500, none of which is attributable to capital gains. Mr. A works in the banking industry and receives an annual income of $32,500.while Mrs. A, who owns the only travel agency in town, makes about $40,000 a year. The G’s family give extensively to charities.

Character in the case:

Mr. A and Mrs. A

Adequate information:

Gross annual income is $40,000.

Medical expenses are $3,600.

Braces expense is $1,500.

Real estate taxes are $900.

State taxes withheld and hold is $4,000.

Mortgage interest expense is $7,200.

Charitable contribution is $3,400.

Unreimbursed business expenses are $2,300.

Qualified adoption expenses are $6,700.

To determine:

Mrs. A’s social security and Medicare taxes that is to be deductible for the year 2014.

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