Ann, who is age 22, just returned to the work force last week after giving birth to twins. She has limited disposable income. She is healthy now but her family history indicates the incidence of stroke. She would like some insurance coverage for her children’s education in the event of her death. What kind of plan would you recommend to Cindy
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Ann, who is age 22, just returned to the work force last week after giving birth to twins. She has limited disposable income. She is healthy now but her family history indicates the incidence of stroke. She would like some insurance coverage for her children’s education in the event of her death. What kind of plan would you recommend to Cindy?
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- Margaret, age 65, and John, age 62, are married with a 23 -year-old daughter who lives in their home. They provide over half of their daughter's support, and their daughter earned $4,100 this year from a part-time job. Their daughter is not a full-time student. The daughter can/cannot be claimed as a dependent because: She cannot be claimed because she is over 19 and not a full-time student. She can be claimed because she is a qualifying child. She can be claimed because she is a qualifying relative. She cannot be claimed because she fails the gross income test.Ashby and Curtis, married professionals, have a two-year-old son, Jason. Curtis works full-time as an electrical engineer, but Ashby has not worked outside the home since Jason was born. As Jason is getting older, Ashby thinks that Jason would benefit from attending nursey school several times a week, which would give her an opportunity to reinvigorate her love of painting at a nearby art studio. Ashby thinks that if she is lucky, the proceeds from the sale of her paintings will pay for the nursery school tuition. Ashby also is planning to claim the credit for child and dependent care expenses, because the care provided Jason at the nursery school is required for her to pursue her art career. Can Ashby and Curtis claim the credit for child and dependent car expenses for the nursery school expenditures? Why or why not?Juanita is the owner of a 30-year-old home, and is looking to buy a homeowner’s insurance policy. The previous home she owned was severely damaged by a tree falling through the roof, a peril that was not covered by her basic-form policy, therefore she is looking to buy a comprehensive policy that covers damage from all perils (except those specifically excluded). Based on the peril coverage it offers, she purchases an insurance policy.
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- Eleanor is the owner of a 15-year-old home, and is looking to buy a homeowner’s insurance policy. She feels it would be overly cautious to purchase protection from all perils, but in addition to protection from fire, vandalism, windstorms, and so on, she also wants insurance for damage caused by malfunctioning of internal structures like air conditioning or plumbing. Based on the peril coverage it offers, she purchases an _________ insurance policy. Her home has a replacement value of $250,000, therefore she insures her home for the minimum legal requirement of __________________. Assuming she does not purchase any additional coverage beyond the legal minimums, complete the following table indicating the maximum dollar value of reimbursement she can receive for each of the following: Damage to personal property: $ _____________________ Detached buildings: $_____________________ Loss of Use (Additional living expenses): $____________________ Property…Stacy was a stay-at-home mom for most of her adult life. At age 45, she started working outside the home. Each year she earns the maximum number of Social Security credits. Until what age must she work to qualify to receive Social Security benefits when she retires? *Carmen had worked for Sparrow Corporation for thirty years when she died of a heart attack at age 60. She was practically penniless at the time of her death, owed a $12,000 hospital bill, and had a disabled spouse. The company was very concerned about its public image, and rather than run the risk of embarrassment from one of its long-term employees dying and leaving her spouse with insufficient means, the Board of Directors agreed to pay Carmen’s hospital bill and to give her spouse $6,000 per year for the rest of his life. Discuss both sides of the question whether Carmen (or her estate) and her spouse realize any taxable income from the above.
- Stan and Sylvia are each 22 years old, and not married. Sylvia is 8+ months pregnant with their unborn child, which is due in October of 2021. During 2021, Stan made $19,900 of wage income, and Sylvia made $49,000. Neither has given anything to charity, and Sylvia has all the medical costs covered by insurance. There are no other items to consider. They are contemplating two options: Option A: Sylvia has the baby, they do not get married, do not live together, and Sylvia lives with and takes full care of the baby. Option B: They get married, live together, and jointly take care of the baby. From a purely tax perspective, which option would you recommend for Sylvia and Stan? You must report empirical evidence from the facts here to support your conclusions. Please show formulasMartha and Louis Mitchell are a dual-career couple who just had their first child. Louis, age 30, already has a group life insurance policy, but Martha's employer does not offer a life insurance benefit. A financial planner is recommending that the 27- year-old Martha buy a $250,000 whole life policy with an annual premium of $1,670 (the policy has an assumed rate of earnings of 5 percent a year). Help Martha evaluate this advice and decide on an appropriate course of action .Sophie Lopez is a 72-year-old widow who has recently been diagnosed with Alzheimer’s disease. She has limited financial assets of her own and has been living with her daughter Felicity for two years. Her income is $850a month in Social Security survivor’s benefits. Felicity wants to make surethat her mother will be taken care of if Felicity should die prematurely. Felicity, 40, is single and earns $55,000 a year as a human resources manager for a small manufacturing firm. She owns a condo with a current market value of $100,000 and has a $70,000 mortgage. Other debtsinclude a $5,000 auto loan and $500 in various credit card balances. Her 401(k) plan has a current balance of $24,500, and she keeps $7,500 in a money market account for emergencies. After talking with her mother’s doctor, Felicity believes that her mother will be able to continue living independently for another two to three years. She estimates that her mother would need about $2,000 a month to cover her living…