MN.47. 2Required information[The following information applies to the questions displayed below.]This year Diane intends to file a married-joint return. Diane received $179,100 of salary and paid $7,850 of interest onloans used to pay qualified tuition costs for her dependent daughter, Deb. This year Diane has also paid moving expensesof $8,350 and $29,100 of alimony to her ex-spouse, Jack, who she divorced in 2012.Note: Round your intermediate calculations and final answer to the nearest whole dollar amount.b. Suppose that Diane also reported income of $8,850 from a half share of profits from a partnership. Disregard any potential self-employment taxes on this income. What AGI would Diane report under these circumstances?Diane's AGI

Adjusted gross income (AGI) refers to the amount of money gained by an entity which is further…

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SWFT Corp Partner Estates Trusts

42nd Edition

ISBN:9780357161548

Author:Raabe

Publisher:Raabe

Chapter2: The Deduction For qualified Business Income For Pass-through Entities

Section: Chapter Questions

Problem 18CE

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Answer the following questions: Under a 2017 divorce agreement, Joan is required to pay her ex-husband, Bill, $ 700 a month until their daughter is 18 years of age. At that time, the required payments are reduced to $ 450 per month. 1. How much of each $ 700 payment may be deducted as alimony by Joan?$____________ 2. How much of each $ 700 payment must be included in Bill's taxable income?$____________ 3. How much would be deductible/included if the divorce agreement were dated 2019? $____________ Under the terms of a property settlement executed during 2019, Jane transferred property worth $ 450,000 to her ex-husband, Tom. The property has a tax basis to Jane of $ 425,000. 1. How much taxable gain must be recognized by Jane at the time of the transfer?$____________ 2. What is the amount of Tom's tax basis in the property he received from Jane?$____________
Lance H. and Wanda B. Dean are married and live at 431 Yucca Drive, Santa Fe, NM 87501. Lance works for the convention bureau of the local Chamber of Commerce, and Wanda is employed part-time as a paralegal for a law firm. During 2018, the Deans had the following receipts: Wanda was previously married to John Allen. When they divorced several years ago, Wanda was awarded custody of their two children, Penny and Kyle. (Note: Wanda has never issued a Form 8332 waiver.) Under the divorce decree, John was obligated to pay alimony and child supportthe alimony payments were to terminate if Wanda remarried. In July, while going to lunch in downtown Santa Fe, Wanda was injured by a tour bus. Because the driver was clearly at fault, the owner of the bus, Roadrunner Touring Company, paid her medical expenses (including a one-week stay in a hospital). To avoid a lawsuit, Roadrunner also transferred 90,000 to her in settlement of the personal injuries she sustained. The Deans had the following expenditures for 2018: The life insurance policy was taken out by Lance several years ago and designates Wanda as the beneficiary. As a part-time employee, Wanda is excluded from coverage under her employers pension plan. Consequently, she provides for her own retirement with a traditional IRA obtained at a local trust company. Because the mayor is a member of the local Chamber of Commerce, Lance felt compelled to make the political contribution. The Deans household includes the following, for whom they provide more than half of the support: Penny graduated from high school on May 9, 2018, and is undecided about college. During 2018, she earned 8,500 (placed in a savings account) playing a harp in the lobby of a local hotel. Wayne is Wandas widower father who died on December 20, 2017. For the past few years, Wayne qualified as a dependent of the Deans. Federal income tax withheld is 4,200 (Lance) and 2,100 (Wanda). The proper amount of Social Security and Medicare tax was withheld. Determine the Federal income tax for 2018 for the Deans on a joint return by completing the appropriate forms. They do not want to contribute to the Presidential Election Campaign Fund. All members of the family had health care coverage for all of 2018. If an overpayment results, it is to be refunded to them. Suggested software: ProConnect Tax Online.
LO.4, 9 Walter and Nancy provide 60% of the support of their daughter (age 18) and son-in-law (age 22). The son-in-law (John) is a full-time student at a local university, and the daughter (Irene) holds various part-time jobs from which she earns 11,000. Walter and Nancy engage you to prepare their tax return for 2019. During a meeting with them in late March 2020, you learn that John and Irene have filed a joint return. What tax advice would you give based on the following assumptions? a. All parties live in Louisiana (a community property state). b. All parties live in New Jersey (a common law state).

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