MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
20th Edition
ISBN: 9781259969614
Author: SPILKER
Publisher: MCG
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Chapter 5, Problem 69P
To determine
Ascertain the taxable amount to be included in gross income under the given circumstances.
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What amounts are included in gross income for the following taxpayers? (Leave no answers blank. Enter zero if
applicable.)
a. Janus sued Tiny Toys for personal injuries from swallowing a toy. Janus was paid $34,000 for medical costs and $270,000 for
punitive damages.
Amount included in Gross Income
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b. Carl was injured in a car accident. Carl's insurance paid him $580 to reimburse his medical expenses and an additional $290 for the
emotional distress Carl suffered as a result of the accident.
Amount included in Gross Income
Show Transcribed Text
c. Ajax published a story about Pete and as a result Pete sued Ajax for damage to his reputation. Ajax lost in court and paid Pete an
award of $22,000.
Amount included in Gross Income
Show Transcribed Text
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d. Bevis was laid off from his job last month. This month he drew $960 in unemployment benefits.
Amount included in Gross Income
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Oswald, while walking down the street, is hit by a reckless driver. Oswald
sues the driver and recovers the following damages:
$20,000 to reimburse Johnny for medical expenses previously
incurred (but not previously deducted),
$10,000 for pain and suffering,
$5,000 for emotional distress stemming from the accident, and
$2,500 in punitive damages
How much of Oswald's recovery is included in gross income?
Robert had an accident and injured a driver and her car. He has auto insurance with the minimum coverage for Illinois. He also has medical payments coverage of $1,000 and a $250 deductible on his collision coverage. The driver's injuries cost $5,000 and damages to her car cost $3,000. Robert's car had damages costing $4,000. How much will the Insurance company pay for these claims?
$12,000
$11,250
$11,750
$3,750
Chapter 5 Solutions
MCGRAW-HILL'S TAX.OF INDIV.+BUS.2020
Ch. 5 - Based on the definition of gross income in 61 and...Ch. 5 - Based on the definition of gross income in 61,...Ch. 5 - Describe the concept of realization for tax...Ch. 5 - Prob. 4DQCh. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Prob. 7DQCh. 5 - Compare how the return of capital principle...Ch. 5 - This year Jorge received a refund of property...Ch. 5 - Describe in general how the cash method of...
Ch. 5 - Prob. 11DQCh. 5 - Prob. 12DQCh. 5 - Contrast the constructive receipt doctrine with...Ch. 5 - Dewey is a lawyer who uses the cash method of...Ch. 5 - Clyde and Bonnie were married this year. Clyde has...Ch. 5 - Distinguish earned income from unearned income,...Ch. 5 - Prob. 17DQCh. 5 - Prob. 18DQCh. 5 - Prob. 19DQCh. 5 - George purchased a life annuity to provide him...Ch. 5 - Prob. 21DQCh. 5 - Prob. 22DQCh. 5 - Clem and Ida have been married for several years,...Ch. 5 - Larry Bounds has won the Gold Bat Award for...Ch. 5 - Prob. 25DQCh. 5 - Prob. 26DQCh. 5 - Prob. 27DQCh. 5 - Explain why an insolvent taxpayer is allowed to...Ch. 5 - Prob. 29DQCh. 5 - Prob. 30DQCh. 5 - Prob. 31DQCh. 5 - Prob. 32DQCh. 5 - Explain how state and local governments benefit...Ch. 5 - Prob. 34DQCh. 5 - Prob. 35DQCh. 5 - Prob. 36DQCh. 5 - Prob. 37DQCh. 5 - Tom was just hired by Acme Corporation and has...Ch. 5 - For the following independent cases, determine...Ch. 5 - Prob. 40PCh. 5 - Prob. 41PCh. 5 - Prob. 42PCh. 5 - Prob. 43PCh. 5 - Prob. 44PCh. 5 - Last year Acme paid Ralph 15,000 to install a new...Ch. 5 - Prob. 46PCh. 5 - L. A. and Paula file as married taxpayers. In...Ch. 5 - Clyde is a cash-method taxpayer who reports on a...Ch. 5 - Identify the amount, if any, that these...Ch. 5 - Ralph owns a building that he is trying to lease....Ch. 5 - Anne purchased an annuity from an insurance...Ch. 5 - Larry purchased an annuity from an insurance...Ch. 5 - Prob. 53PCh. 5 - Lanny and Shirley divorced in 2018 and do not live...Ch. 5 - Prob. 55PCh. 5 - Grady received 8,200 of Social Security benefits...Ch. 5 - Prob. 57PCh. 5 - Nikki works for the Shine Company, a retailer of...Ch. 5 - Prob. 59PCh. 5 - Prob. 60PCh. 5 - Grady is a 45-year-old employee with AMUCK Garbage...Ch. 5 - Prob. 62PCh. 5 - Prob. 63PCh. 5 - Cecil cashed in a Series EE savings bond with a...Ch. 5 - Prob. 65PCh. 5 - Prob. 66PCh. 5 - Terry was ill for three months and missed work...Ch. 5 - Prob. 68PCh. 5 - Prob. 69PCh. 5 - This year, Janelle received 200,000 in life...Ch. 5 - Prob. 71PCh. 5 - Prob. 72PCh. 5 - Charlie was hired by Ajax this year as a corporate...Ch. 5 - Irene is disabled and receives payments from a...Ch. 5 - Ken is 63 years old and unmarried. He retired at...Ch. 5 - Prob. 76CPCh. 5 - Diana and Ryan Workman were married on January 1...
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- A) Nathaniel was severely injured while at work, he lost a portion of right arm. Nathaniel received compensatory and punitive damages for his loss. He received $20,000 in compensatory damages for his medical expenses, $5,000,000 for lost income, $400,000 for pain and suffering, and $800,000 in punitive damages. How much of the damages should Nathaniel include in gross income? B) Tamara and Shane entered into a divorce decree on May 2, 2019. Shane is required to pay his former spouse $3,000 a month. Tamara has custody of their only child, Nicole. When Nicole turns 18 on August 31, 2019, the payments change to $2,500 per month. The remaining $2,500 is to be paid to Tamara as long as she lives or until she remarries. How much of the payments from Shane should be included in Tamara’s 2019 gross income.arrow_forwardGussie Fring has 100/300/50 automobile insurance coverage, and was involved in a very serious accident. One person sustained $200,000 in medical claims, and two other people are awarded a total of $135,000 each for injuries in an auto accident in which Gussie was judged at fault. How much, if any, of this judgment would the insurance not cover?arrow_forward2. Donald owns a car repair business. Hoodlums broke into his shop at night and stole his personal vehicle, which was there being repaired. His vehicle’s FMV before being stolen was 25,000 and FMV after was zero. The cost to replace his vehicle was 19,000, which is the amount he received in insurance proceeds. Donald’s AGI is $90,000. What deduction can Donald take on his 1040 due to the break-in? 0 6000 19000 25000arrow_forward
- Required information (The following information applies to the questions displayed below) What amounts are included in gross income for the following taxpayers? Note: Leave no answers blank. Enter zero if applicable. c. Ajax published a story about Pete, and as a result Pete sued Ajax for damage to his reputation. Ajax lost in court and paid Pete an award of $20,000. Amount included in Gross Incomearrow_forwardNorris has a deductible of $1,000. He damages his car in a accident and it will cost $3,300 to repair. How much does Norris have to pay? How much does this insurance pay?arrow_forward4.arrow_forward
- Becky has 25/60/10 automobile insurance coverage. If two other people are awarded $32,000 each for injuries in an auto accident in which Becky was judged at fault, how much of this judgment would the insurance cover?arrow_forwardOld Granddad can no longer safely navigate the stairs in his home. So he pays $60,000 to have an elevator installed. Explain how you would treat this ex-penditure within the medical expense deduction rules. In 4-5 sentences, give a hypothetical example of how a deductible amount would be calculated. Alterna-tively, if you believe that no deductible would be available, explain why in 4-5 sentences.arrow_forwardSally is an employee of Blue Corporation. Last year, she purchased a very expensive computer with her own funds. She used the computer 100% for business purposes. During the current year, the computer was completely destroyed in a fire. Blue Corporation did not reimburse her for her loss. Discuss whether Sally’s loss will create or increase Sally’s net operating loss. How does Sally treat the loss (carryback or/and carryforward periods)? If a taxpayer who sustains a casualty loss in an area designated by the President of the United States as a disaster area, he or she may take the loss in the year in which the loss occurred or elect to take the loss in the previous year. Identify factors that should be considered in deciding in which year to take the lossarrow_forward
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