Taxation I would like to have some guidance for the following question. Thank you kindly. Gerald and Patty Hanson are married taxpayer with the following income and expenses for 2018: Gerald’s w-2 wages: $80,000 Patty’s w-2 wages: $40,000 Patty’s sole proprietorship (Patty is a noted sculptor): Sales $20,000, Materials (8,000), Depreciation (1,000) Interest income on their investments $5,000 Dividend income $500 Additionally, Gerald and Patty incurred the following expenses: Prescription drugs (after insurance) $450 Vitamins 100 Medical insurance premiums 1,350 Braces for their son (not covered by insurance) 1,500 Clinic and hospital bills (after insurance) 800 Property taxes on home 5,000 State income taxes: Withheld from their w-2 6,000, Estimated payments 400 Federal income taxes withheld 30,000 State and local sales tax paid on new personal auto 1,000 Interest on home mortgage 10,000 Interest paid on credit cards 2,400 Cash contributions to church 3,000 Contribution of ABC stock to United Way (FMV $10,000, adjusted basis $2,000) Patty donated a sculpture to the local art museum. The sculpture was appraised at $5,000. Gerald, a CPA, paid $300 for his CPA license. His employer does not reimburse the cost for the license. In addition, Gerald and Patty drove 300 miles this year for medical and dental treatments. Patty also drove 1000 miles to attend a conference for her church. Patty was not a delegate to this conference. Required: 1. Determine Gerald and Patty’s adjusted gross income for 2018. 2. Determine Gerald and Patty’s itemized deductions. 3. Determine Gerald and Patty’s taxable income.
Taxation I would like to have some guidance for the following question. Thank you kindly. Gerald and Patty Hanson are married taxpayer with the following income and expenses for 2018: Gerald’s w-2 wages: $80,000 Patty’s w-2 wages: $40,000 Patty’s sole proprietorship (Patty is a noted sculptor): Sales $20,000, Materials (8,000), Depreciation (1,000) Interest income on their investments $5,000 Dividend income $500 Additionally, Gerald and Patty incurred the following expenses: Prescription drugs (after insurance) $450 Vitamins 100 Medical insurance premiums 1,350 Braces for their son (not covered by insurance) 1,500 Clinic and hospital bills (after insurance) 800 Property taxes on home 5,000 State income taxes: Withheld from their w-2 6,000, Estimated payments 400 Federal income taxes withheld 30,000 State and local sales tax paid on new personal auto 1,000 Interest on home mortgage 10,000 Interest paid on credit cards 2,400 Cash contributions to church 3,000 Contribution of ABC stock to United Way (FMV $10,000, adjusted basis $2,000) Patty donated a sculpture to the local art museum. The sculpture was appraised at $5,000. Gerald, a CPA, paid $300 for his CPA license. His employer does not reimburse the cost for the license. In addition, Gerald and Patty drove 300 miles this year for medical and dental treatments. Patty also drove 1000 miles to attend a conference for her church. Patty was not a delegate to this conference. Required: 1. Determine Gerald and Patty’s adjusted gross income for 2018. 2. Determine Gerald and Patty’s itemized deductions. 3. Determine Gerald and Patty’s taxable income.
Chapter19: Family Tax Planning
Section: Chapter Questions
Problem 38P
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I would like to have some guidance for the following question. Thank you kindly.
Gerald and Patty Hanson are married taxpayer with the following income and expenses for 2018:
- Gerald’s w-2 wages: $80,000
- Patty’s w-2 wages: $40,000
- Patty’s sole proprietorship (Patty is a noted sculptor): Sales $20,000, Materials (8,000),
Depreciation (1,000) - Interest income on their investments $5,000
- Dividend income $500
Additionally, Gerald and Patty incurred the following expenses:
- Prescription drugs (after insurance) $450
- Vitamins 100
- Medical insurance premiums 1,350
- Braces for their son (not covered by insurance) 1,500
- Clinic and hospital bills (after insurance) 800
- Property taxes on home 5,000
- State income taxes: Withheld from their w-2 6,000, Estimated payments 400
- Federal income taxes withheld 30,000
- State and local sales tax paid on new personal auto 1,000
- Interest on home mortgage 10,000
- Interest paid on credit cards 2,400
- Cash contributions to church 3,000
- Contribution of ABC stock to United Way (FMV $10,000, adjusted basis $2,000)
- Patty donated a sculpture to the local art museum. The sculpture was appraised at $5,000.
- Gerald, a CPA, paid $300 for his CPA license. His employer does not reimburse the cost for the license.
In addition, Gerald and Patty drove 300 miles this year for medical and dental treatments. Patty also drove 1000 miles to attend a conference for her church. Patty was not a delegate to this conference.
Required:
1. Determine Gerald and Patty’s adjusted gross income for 2018.
2. Determine Gerald and Patty’s itemized deductions.
3. Determine Gerald and Patty’s taxable income.
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