a. Compute Charlotte's taxable income. 62,400 X b. Using the Tax Rate Schedules (click here), tax liability (before any allowable credits) for Charlotte is $ c. Compute Charlotte's child and dependent tax credit. Charlotte's child tax credit is $ 500 X of which $ 8,000, of which $ 500 X may be refundable. 7,206 X for 2023. 5,600 X may be refundable and her dependent tax credit is $

a. Compute Charlotte's taxable income. 62,400 X b. Using the Tax Rate Schedules (click here), tax liability (before any allowable credits) for Charlotte is $ c. Compute Charlotte's child and dependent tax credit. Charlotte's child tax credit is $ 500 X of which $ 8,000, of which $ 500 X may be refundable. 7,206 X for 2023. 5,600 X may be refundable and her dependent tax credit is $

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter9: Individuals As Taxpayers

Section: Chapter Questions

Problem 7BCRQ

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John Benson, age 40, is single. His Social Security number is 111-11-1111, and he resides at 150 Highway 51, Tangipahoa, LA 70465. John has a 5-year-old child, Kendra, who lives with her mother, Katy. As a result of his divorce in 2016, John pays alimony of 6,000 per year to Katy and child support of 12,000. The 12,000 of child support covers 65% of Katys costs of rearing Kendra. Kendras Social Security number is 123-45-6789, and Katys is 123-45-6788. Johns mother, Sally, lived with him until her death in early September 2019. He incurred and paid medical expenses for her of 15,588 and other support payments of 11,000. Sallys only sources of income were 5,500 of interest income on certificates of deposit and 5,600 of Social Security benefits, which she spent on her medical expenses and on maintenance of Johns household. Sallys Social Security number was 123-45-6787. John is employed by the Highway Department of the State of Louisiana in an executive position. His salary is 95,000. The appropriate amounts of Social Security tax and Medicare tax were withheld. In addition, 9,500 was withheld for Federal income taxes and 4,000 was withheld for state income taxes. In addition to his salary, Johns employer provides him with the following fringe benefits. Group term life insurance with a maturity value of 95,000; the cost of the premiums for the employer was 295. Group health insurance plan; Johns employer paid premiums of 5,800 for his coverage. The plan paid 2,600 for Johns medical expenses during the year. Upon the death of his aunt Josie in December 2018, John, her only recognized heir, inherited the following assets. Three months prior to her death, Josie gave John a mountain cabin. Her adjusted basis for the mountain cabin was 120,000, and the fair market value was 195,000. No gift taxes were paid. During the year, John reported the following transactions. On February 1, 2019, he sold for 45,000 Microsoft stock that he inherited from his father four years ago. His fathers adjusted basis was 49,000, and the fair market value at the date of the fathers death was 41,000. The car John inherited from Josie was destroyed in a wreck on October 1, 2019. He had loaned the car to Katy to use for a two-week period while the engine in her car was being replaced. Fortunately, neither Katy nor Kendra was injured. John received insurance proceeds of 16,000, the fair market value of the car on October 1, 2019. On December 28, 2019, John sold the 300 acres of land to his brother, James, for its fair market value of 160,000. James planned on using the land for his dairy farm. Other sources of income for John are: Potential itemized deductions for John, in addition to items already mentioned, are: Part 1Tax Computation Compute Johns net tax payable or refund due for 2019. Part 2Tax Planning Assume that rather than selling the land to James, John is considering leasing it to him for 12,000 annually with the lease beginning on October 1, 2019. James would prepay the lease payments through December 31, 2019. Thereafter, he would make monthly lease payments at the beginning of each month. What effect would this have on Johns 2019 tax liability? What potential problem might John encounter? Write a letter to John in which you advise him of the tax consequences of leasing versus selling. Also prepare a memo addressing these issues for the tax files.
Problem 3-39 (LO. 1, 2, 3, 4, 5, 6) Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children (ages 4, 8, 11, and 14) who live with her. She also maintains the household in which her parents live and furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte has a salary of $80,000, a short-term capital loss of $2,000, a cash prize of $4,000 from a church raffle, and itemized deductions of $10,500. Click here to access the Components of the tax formula to use, if required. If an amount is zero, enter "$0". a. Compute Charlotte's taxable income. b. Using the Tax Rate Schedules (click here), tax liability (before any allowable credits) for Charlotte is $ c. Compute Charlotte's child and dependent tax credit. Charlotte's child tax credit is $ of which of which $ may be refundable. for 2022. may be refundable and her dependent tax credit is $
Problem 3-39 (LO. 1, 2, 3, 4, 5, 6) Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children (ages 4, 8, 11, and 14) who live with her. She also maintains the household in which her parents live and furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte has a salary of $80,000, a short-term capital loss of $2,000, a cash prize of $4,000 from a church raffle, and itemized deductions of $10,500. Click here to access the standard deduction table to use, if required. If an amount is zero, enter "$0". a. Compute Charlotte's taxable income.$fill in the blank 1 b. Using the Tax Rate Schedules (click here), tax liability (before any allowable credits) for Charlotte is $fill in the blank 2 for 2021. c. Compute Charlotte's child and dependent tax credit.Charlotte's child tax credit is $fill in the blank 3, of which $fill in the blank 4 may be…
Aa.43. Adrienne is a single mother with a six-year-old daughter who lived with her during the entire year. Adrienne paid $2,050 in child care expenses so that she would be able to work. Of this amount, $540 was paid to Adrienne’s mother, whom Adrienne cannot claim as a dependent. Adrienne had net earnings of $1,100 from her jewelry business. In addition, she received child support payments of $20,100 from her ex-husband. Use Child and Dependent Care Credit AGI schedule. Required: What amount, if any, of child and dependent care credit can Adrienne claim?
Problem 3-36 (LO. 1, 2, 3, 4, 5, 6) Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children who live with her (all are under age 16). She also maintains the household in which her parents live and furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte has a salary of $80,000, a short- term capital loss of $2,000, a cash prize of $4,000 from a church raffle, and itemized deductions of $10,500. Click here to access the standard deduction table to use, if required. If an amount is zero, enter "$0". a. Compute Charlotte's taxable income. $ b. Using the Tax Rate Schedules (click here), tax liability (before any allowable credits) for Charlotte is $ for 2020. c. Compute Charlotte's child and dependent tax credit. Charlotte's child tax credit is $ of which $ may be refundable and her dependent tax credit is $ of which $ may be refundable.
Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children (ages 4, 8, 11, and 14) who live with her. She also maintains the household in which her parents live and furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte has a salary of $80,000, a short-term capital loss of $2,000, a cash prize of $4,000 from a church raffle, and itemized deductions of $10,500. Click here to access the standard deduction table to use, if required. If an amount is zero, enter "$0". a. Compute Charlotte's taxable income. $fill in the blank: 56,900 (correct) b. Using the Tax Rate Schedules (click here), tax liability (before any allowable credits) for Charlotte is $fill in the blank: 6,430 for 2021. (correct) c. Compute Charlotte's child and dependent tax credit. Charlotte's child tax credit is $fill in the blank: 12,600 (Incorrect) , of which $fill in the…
Chin, who is not married, provides a home for his 21-year-old daughter who attends college full-time at a community college. His daughter earns $12,400 this year. Chin’s grandma also lives with him, and he provides more than 50% of her support. What credit and how much is available to Chin? a. $0 credit allowed b. $3,000 child tax credit, $500 family tax credit c. $3,000 child tax credit, $0 family tax credit d. $0 child tax credit, $1,000 family tax credit
• Monica is 31 years old and married to Mike. Mike passed away on February 2, 2021. Monica has not remarried. • Monica's eight-year-old daughter, Emma, lived with her the entire year. • Monica paid more than half the cost of keeping up a home and support for Emma. • Monica received a distribution from her traditional IRA in January to pay for living expenses. • Monica was a full-time high school teacher and earned $42,000 in wages. Monica purchased supplies including masks and hand sanitizer for her class out of her own pocket totaling $450. • Monica received a W-2G in the amount of $10,000 from the local casino. • Monica paid child and dependent care expenses for Emma while she worked. • Monica and Emma are U.S. citizens and have valid Social Security numbers. They lived in the United States for the entire year. • If Monica is entitled to a refund, she would like to deposit half into her checking account and half into her savings…
Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children who live with her (all are under age 16). She also maintains the household in which her parents live and furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte's father received $2,400 from a part-time job. Charlotte has a salary of $80,000, a short-term capital loss of $2,000, a cash prize of $4,000 from a church raffle, and itemized deductions of $10,500. FILING STATUS 2019 2020 Single 12,200 12,400 Married, Filing Jointly 24,400 24,800 Surviving spoise 24,400 24,800 Head of Household 18,350 18,650 Married, Filing Seperate 12,200 12.400 A. a. Compute Charlotte's taxable income. B b. Using the Tax Rate Schedules (See attached), tax liability (before any allowable credits) for Charlotte is $ *Blank* for 2020. C. c. Compute Charlotte's child and dependent tax credit.Charlotte's child tax credit is $ ________, of which $…
Problem 6-50 (LO. 1, 3) Chee, single, age 40, had the following income and expenses during 2021: Income Salary $43,000 Rental of vacation home (rented 60 days, used personally 60 days, vacant 245 days) 4,000 Municipal bond interest 2,000 Dividend from General Electric 400 Expenses Interest on home mortgage 8,400 Interest on vacation home 4,758 Interest on loan used to buy municipal bonds 3,100 Property tax on home 2,200 Property tax on vacation home 1,098 State income tax 3,300 State sales tax 900 Charitable contributions 1,100 Tax return preparation fee 300 Utilities and maintenance on vacation home 2,600 Depreciation on rental portion of vacation home 3,500 Calculate Chee's net income from the vacation home, itemized deductions and taxable income for the year. If Chee has any options, choose the method that maximizes his deductions. In your computations, round any fractions to four decimal places. Then, round any amounts to the…
Charlotte (age 40) is a surviving spouse and provides all of the support of her four minor children, who live with her. Charlotte also maintains the household in which her parents live, and she furnished 60% of their support. Besides interest on City of Miami bonds in the amount of $5,500, Charlotte’s father received $2,400 from a part-time job. Charlotte earns an $80,000 salary, a short-term capital loss of $2,000, and a cash prize of $4,000 at a church raffle. Charlotte reports itemized deductions of $10,500. Use tax figures for 2022.a. Compute Charlotte's taxable income.b. Using the Tax Rate Schedules , tax liability for Charlotte is $ for 2022.c. Compute Charlotte's child and dependent tax credit.
Ashley Panda lives at 1310 Meadow Lane, Wayne, OH 43466, and her Social Security number is 123-45-6777. Ashley is single and has a 20-year-old son, Bill. His Social Security number is 111-11-1112. Bill lives with Ashley, and she fully supports him. Bill spent 2018 traveling in Europe and was not a college student. He had gross income of 4,655 in 2018. Bill paid 4,000 of lodging expenses that Ashley reimbursed after they were fully documented. Ashley paid the 4,000 to Bill using a check from her sole proprietorship. That amount is not included in the items listed below. Ashley had substantial health problems during 2018, and many of her expenses were not reimbursed by her health insurance. Ashley owns Panda Enterprises, LLC (98-7654321), a data processing service that she operates as a sole proprietorship. Her business is located at 456 Hill Street, Wayne, OH 43466. The business activity code is 514210. Her 2018 Form 1040, Schedule C for Panda Enterprises shows revenues of 315,000, office expenses of 66,759, employee salary of 63,000, employee payroll taxes of 4,820, business meal expenses (before the 50% reduction) of 22,000, and rent expense of 34,000. The rent expense includes payments related to renting an office (30,000) and payments related to renting various equipment (4,000). There is no depreciation because all depreciable equipment owned has been fully depreciated in previous years. No fringe benefits are provided to the employee. Ashley personally purchases health insurance on herself and Bill. The premiums are 23,000 per year. Ashley has an extensive stock portfolio and has prepared the following analysis: Note: Ashley received a Form 1099B from her stockbroker that included the adjusted basis and sales proceeds for each of her stock transactions. The per-share cost includes commissions, and the per-share selling price is net of commissions. Also, the dividends are the actual dividends received in 2018, and these are both ordinary dividends and qualified dividends. Ashley had 800 of interest income from State of Ohio bonds and 600 of interest income on her Wayne Savings Bank account. She paid 25,000 of alimony to her former husband. His Social Security number is 123-45-6788. Ashley itemizes her deductions and provides the following information, which may be relevant to her return: Ashley made a 26,000 estimated Federal income tax payment, does not want any of her taxes to finance presidential elections, has no foreign bank accounts or trusts, and wants any refund to be applied against her 2019 taxes. Compute Ashleys net tax payable or refund due for 2018. If you use tax forms for your computations, you will need Form 1040 and its Schedules 1, 4, 5, A, C, D, and SE and Form 8949. Ashley qualifies for the 199A deduction for qualified business income. Be sure to include that in your calculations. Suggested software: ProConnect Tax Online.