1. LO.3 Liz and Doug were divorced on December 31, 2020, after 10 years of marriage. Their current year's income received before the divorce was as follows: Doug's salary Liz's salary Rent on apartments purchased by Liz 15 years ago Dividends on stock Doug inherited from his mother 4 years ago Interest on a savings account in Liz's name funded with her salary $41,000 55,000 8,000 1,900 2,400

1. LO.3 Liz and Doug were divorced on December 31, 2020, after 10 years of marriage. Their current year's income received before the divorce was as follows: Doug's salary Liz's salary Rent on apartments purchased by Liz 15 years ago Dividends on stock Doug inherited from his mother 4 years ago Interest on a savings account in Liz's name funded with her salary $41,000 55,000 8,000 1,900 2,400

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 35P

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LO.3 Simba and Zola are married but file separate returns. Simba received 80,000 of salary and 1,200 of taxable dividends on stock he purchased in his name and paid from the salary he earned since the marriage. Zola collected 900 in taxable interest on a certificate of deposit she inherited from her aunt. Compute Zolas gross income under two assumptions as to the state of residency of the couple. If an amount is zero, enter 0.
LO.4, 8 Joyce, a widow, lives in an apartment with her two minor children (ages 8 and 10), whom she supports. Joyce earns 33,000 during 2019. She uses the standard deduction. a. Calculate the amount, if any, of Joyces earned income credit. b. During the year, Joyce is offered a new job that has greater future potential than her current job. If she accepts the job offer, her earnings for the year will be 39,000; however, she is afraid she will not qualify for the earned income credit. Using after-tax cash-flow calculations, determine whether Joyce should accept the new job offer. Since the child tax credit will be the same under either scenario, you can ignore it for purposes of this analysis.
LO2 Fatima inherits a rental property with a fair market value of 90,000 from her aunt on April 30. On May 15, the executor of the estate sends her a check for 7,000. A letter accompanying the check states that the 7,000 comes from the rent received on the property since her aunts death. Fatima receives 6,600 in rent on the property during the remainder of the year and pays allow able expenses of 4,200 on the property. How much gross income does Fatima have from these transactions?
LO.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?