Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2022. She is 45 years old and divorced for four years. She receives $1,200 of alimony payments each month from her former husband (di 2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments and she incurred $19.500 of expenses associated with the rental. Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this ye provides more than one-half of Heather's support. They had been living in Colorado for the past 15 years, b her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last Decem position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,15 personal belongings, and she and Heather spent two days driving the 1,500 miles to Georgia. Reba rented a home in Georgia. Heather decided to continue living at home with her mom, but she started school full-time in January and throughout the rest of the year at a nearby university. She was awarded a $3 tuition scholarship this year, and Reba helped out by paying the remaining $500 tuition cost. If possible. Re would be best to claim the education credit for these expenses.
Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2022. She is 45 years old and divorced for four years. She receives $1,200 of alimony payments each month from her former husband (di 2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments and she incurred $19.500 of expenses associated with the rental. Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this ye provides more than one-half of Heather's support. They had been living in Colorado for the past 15 years, b her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last Decem position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,15 personal belongings, and she and Heather spent two days driving the 1,500 miles to Georgia. Reba rented a home in Georgia. Heather decided to continue living at home with her mom, but she started school full-time in January and throughout the rest of the year at a nearby university. She was awarded a $3 tuition scholarship this year, and Reba helped out by paying the remaining $500 tuition cost. If possible. Re would be best to claim the education credit for these expenses.
Chapter8: Taxation Of Individuals
Section: Chapter Questions
Problem 51P
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![Required Information
[The following information applies to the questions displayed below.]
Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2022. She is 45 years old and has been
divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in
2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments from tenants
and she incurred $19.500 of expenses associated with the rental.
Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba
provides more than one-half of Heather's support. They had been living in Colorado for the past 15 years, but ever since
her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching
position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,150 to move their
personal belongings, and she and Heather spent two days driving the 1,500 miles to Georgia.
Reba rented a home in Georgia. Heather decided to continue living at home with her mom, but she started attending
school full-time in January and throughout the rest of the year at a nearby university. She was awarded a $3.210 partial
tuition scholarship this year, and Reba helped out by paying the remaining $500 tuition cost. If possible. Reba thought it
would be best to claim the education credit for these expenses.
Reba wasn't sure if she would have enough items to help her benefit from itemizing on her tax return. However, she kept
track of several expenses this year that she thought might qualify if she was able to itemize. Reba paid $6,415 in state
income taxes and $13,410 in charitable contributions during the year. She also paid the following medical-related
expenses for herself and Heather:
Insurance premiums
Medical care expenses
Prescription medicine
Nonprescription medicine
New contact lenses for Heather
$ 8,510
$ 1,100
$ 420
$
100
$ 200
Shortly after the move, Reba got distracted while driving and ran into a street sign. The accident caused $970 in damage
to the car and gave her whiplash. Because the repairs were less than her insurance deductible, she paid the entire cost of
the repairs. Reba wasn't able to work for two months after the accident. Fortunately, she received $2,000 from her
disability insurance. Her employer, the Central Georgia School District, paid 60 percent of the premiums on the policy as a
nontaxable fringe benefit and Reba paid the remaining 40 percent portion.
A few years ago. Reba acquired several investments with her portion of the divorce settlement. This year she reported the
following income from her investments: $2,200 of interest income from corporate bonds and $1,640 interest income from
City of Denver municipal bonds. Overall, Reba's stock portfolio appreciated by $12,860, but she did not sell any of her
stocks.
Heather reported $6,300 of interest income from corporate bonds she received as gifts from her father over the last
several years. This was Heather's only source of income for the year.
Reba had $10,720 of federal income taxes withheld by her employer. Heather made $1,070 of estimated tax payments
during the year. Reba did not make any estimated payments.
a-1. Determine Reba's federal income taxes due or taxes payable for the current year. Use Tax Rate Schedule for reference.
Note: Do not round intermediate values. Round your final answers to the nearest whole dollar amount. Leave no answer blank.
Enter zero If applicable.
Description
Amount
Gross Income:
Salary
$
38,000
Alimony received
14,400
Rental receipts
$
50,000
Disability insurance payments
$
1,200
Interest income from corporate bonds
S
2,200
Interest income from municipal bonds
$
이
(1) Gross income
$
105,800
Deductions for AGI:
Expenses for rental property
(2) Total for AGI deductions
(3) AGI
From AGI deductions:
Medical expenses
$
19,500
$
19,500
$
88,300
State income taxes
Charitable contributions
(4) Total itemized deductions
$
3,758
$
6,415
$
13,410
$
23,583
(5) Standard deduction
(6) Greater of itemized deductions or standard deduction
$
23,583
(7) Taxable income
$
62,717
(8) Tax on taxable income
(9) Credits
(10) Tax prepayments
(685)
$
10,720
Tax refund](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fdcbf3bc1-dcea-4f7d-ad84-039780bb0290%2Fbb23eaf7-0d67-421b-9736-4f96f7e15873%2Fvn55fx_processed.png&w=3840&q=75)
Transcribed Image Text:Required Information
[The following information applies to the questions displayed below.]
Reba Dixon is a fifth-grade school teacher who earned a salary of $38,000 in 2022. She is 45 years old and has been
divorced for four years. She receives $1,200 of alimony payments each month from her former husband (divorced in
2016). Reba also rents out a small apartment building. This year Reba received $50,000 of rental payments from tenants
and she incurred $19.500 of expenses associated with the rental.
Reba and her daughter Heather (20 years old at the end of the year) moved to Georgia in January of this year. Reba
provides more than one-half of Heather's support. They had been living in Colorado for the past 15 years, but ever since
her divorce, Reba has been wanting to move back to Georgia to be closer to her family. Luckily, last December, a teaching
position opened up and Reba and Heather decided to make the move. Reba paid a moving company $2,150 to move their
personal belongings, and she and Heather spent two days driving the 1,500 miles to Georgia.
Reba rented a home in Georgia. Heather decided to continue living at home with her mom, but she started attending
school full-time in January and throughout the rest of the year at a nearby university. She was awarded a $3.210 partial
tuition scholarship this year, and Reba helped out by paying the remaining $500 tuition cost. If possible. Reba thought it
would be best to claim the education credit for these expenses.
Reba wasn't sure if she would have enough items to help her benefit from itemizing on her tax return. However, she kept
track of several expenses this year that she thought might qualify if she was able to itemize. Reba paid $6,415 in state
income taxes and $13,410 in charitable contributions during the year. She also paid the following medical-related
expenses for herself and Heather:
Insurance premiums
Medical care expenses
Prescription medicine
Nonprescription medicine
New contact lenses for Heather
$ 8,510
$ 1,100
$ 420
$
100
$ 200
Shortly after the move, Reba got distracted while driving and ran into a street sign. The accident caused $970 in damage
to the car and gave her whiplash. Because the repairs were less than her insurance deductible, she paid the entire cost of
the repairs. Reba wasn't able to work for two months after the accident. Fortunately, she received $2,000 from her
disability insurance. Her employer, the Central Georgia School District, paid 60 percent of the premiums on the policy as a
nontaxable fringe benefit and Reba paid the remaining 40 percent portion.
A few years ago. Reba acquired several investments with her portion of the divorce settlement. This year she reported the
following income from her investments: $2,200 of interest income from corporate bonds and $1,640 interest income from
City of Denver municipal bonds. Overall, Reba's stock portfolio appreciated by $12,860, but she did not sell any of her
stocks.
Heather reported $6,300 of interest income from corporate bonds she received as gifts from her father over the last
several years. This was Heather's only source of income for the year.
Reba had $10,720 of federal income taxes withheld by her employer. Heather made $1,070 of estimated tax payments
during the year. Reba did not make any estimated payments.
a-1. Determine Reba's federal income taxes due or taxes payable for the current year. Use Tax Rate Schedule for reference.
Note: Do not round intermediate values. Round your final answers to the nearest whole dollar amount. Leave no answer blank.
Enter zero If applicable.
Description
Amount
Gross Income:
Salary
$
38,000
Alimony received
14,400
Rental receipts
$
50,000
Disability insurance payments
$
1,200
Interest income from corporate bonds
S
2,200
Interest income from municipal bonds
$
이
(1) Gross income
$
105,800
Deductions for AGI:
Expenses for rental property
(2) Total for AGI deductions
(3) AGI
From AGI deductions:
Medical expenses
$
19,500
$
19,500
$
88,300
State income taxes
Charitable contributions
(4) Total itemized deductions
$
3,758
$
6,415
$
13,410
$
23,583
(5) Standard deduction
(6) Greater of itemized deductions or standard deduction
$
23,583
(7) Taxable income
$
62,717
(8) Tax on taxable income
(9) Credits
(10) Tax prepayments
(685)
$
10,720
Tax refund
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