PRINCIPLES OF TAXATION F/BUS.+INVEST.
22nd Edition
ISBN: 9781259917097
Author: Jones
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Videos
Question
Chapter 14, Problem 1IRP
To determine
Identify the tax issues and state the issues in the form of a question.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
9. Ivanka and Jared are divorced in the current year. As part of the divorce settlement,
Ivanka transfers a plot of land in Long Island, NY to Jared. Ivanka's basis in the
property was $20,000 and the market value of the property was $250,000 when
transferred. Jared holds the property through the end of the year and in hopes of
building a residence on it. How much income do Ivanka and Jared recognize in the
current year?
a. $0 for Ivanka and $20,000 for Jared
b. $230,000 for Ivanka and $20,000 for Jared
c. $230,000 for Ivanka and $0 for Jared
d. $0 for both Ivanka and Jared
e. $0 for Ivanka and $250,000 for Jared
James and Esther Johnson are husband and wife and file a joint return. They live at 45678 S.W. 112th Street, Homestead, FL 33033. James, who is 67 years old (date of birth 12/14/1953), is retired and receiving social security benefits, and Esther, who is 66 years old (date of birth 6/11/1954), is also retired but working on a part-time basis. Their social security numbers are 412-34-5670 and 412-34-5671, respectively.
Annual social security income for James is $22,000 (SSA-1099, box 5) and for Esther is $13,800 (SSA-1099, box 5).
Interest received by them from Central Bank is $2,545 (1099-INT, box 1). No income tax withholding was made.
Esther is working part-time as an interior decorator as an employee of Decorating House, a corporation. Her form W-2 shows the following information:
Wages =
$ 25,000.00
Federal W/H =
$ 2,500.00
Social security wages =
$ 25,000.00
Social security W/H =
$ 1,550.00
Medicare wages =
$ 25,000.00
Medicare W/H =
$ 362.50
Their itemized…
Simba and Zola are married but file separate returns. Simba received $22,000 of salary and $28,100 of taxable dividends on stock he purchased in his name and paid from the salary that he earned since the marriage. Zola collected $1,600 in taxable interest on certificate of deposit that she inherited from her aunt.
Compute Zola’s gross income under two assumptions as to the state of residency of the couple.
If an amount is zero, enter "$0".
Idaho (Community Property State)
South Carolina (Common Law State)
Dividends
$
$
Interest
$
$
Salary
$
$
Chapter 14 Solutions
PRINCIPLES OF TAXATION F/BUS.+INVEST.
Ch. 14 - Prob. 1QPDCh. 14 - Prob. 2QPDCh. 14 - Why is the formula for computing individual...Ch. 14 - Discuss possible tax policy reasons why...Ch. 14 - Prob. 5QPDCh. 14 - Identify the reasons why individual taxpayers...Ch. 14 - Prob. 7QPDCh. 14 - Individuals who plan to bunch itemized deductions...Ch. 14 - Prob. 9QPDCh. 14 - Single individuals Sam and Zelle were married this...
Ch. 14 - Prob. 11QPDCh. 14 - Under the current rate structure, a high-income...Ch. 14 - Prob. 13QPDCh. 14 - Prob. 14QPDCh. 14 - Prob. 15QPDCh. 14 - Prob. 16QPDCh. 14 - Prob. 1APCh. 14 - Prob. 2APCh. 14 - Prob. 3APCh. 14 - Prob. 4APCh. 14 - Prob. 5APCh. 14 - Prob. 6APCh. 14 - Prob. 7APCh. 14 - Prob. 8APCh. 14 - Prob. 9APCh. 14 - Prob. 10APCh. 14 - Prob. 11APCh. 14 - Prob. 12APCh. 14 - Prob. 13APCh. 14 - Prob. 14APCh. 14 - Prob. 15APCh. 14 - Prob. 16APCh. 14 - Prob. 17APCh. 14 - Prob. 18APCh. 14 - Prob. 19APCh. 14 - Prob. 20APCh. 14 - Prob. 21APCh. 14 - Prob. 22APCh. 14 - Prob. 23APCh. 14 - Prob. 24APCh. 14 - Prob. 25APCh. 14 - Prob. 26APCh. 14 - Prob. 27APCh. 14 - Prob. 28APCh. 14 - Prob. 29APCh. 14 - Prob. 30APCh. 14 - Prob. 31APCh. 14 - Prob. 32APCh. 14 - Prob. 33APCh. 14 - Prob. 34APCh. 14 - Prob. 35APCh. 14 - Prob. 1IRPCh. 14 - Prob. 2IRPCh. 14 - Prob. 3IRPCh. 14 - Mr. Tilton is a 20-year-old college student. This...Ch. 14 - Prob. 5IRPCh. 14 - Prob. 6IRPCh. 14 - Prob. 7IRPCh. 14 - Prob. 8IRPCh. 14 - Prob. 9IRPCh. 14 - Prob. 10IRPCh. 14 - Mr. and Mrs. Marceleno own a sole proprietorship...Ch. 14 - Prob. 12IRPCh. 14 - Prob. 1RPCh. 14 - Prob. 2RPCh. 14 - Prob. 1TPCCh. 14 - Prob. 2TPC
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Rick and Cindy Davis are married and file a joint return. They live at 3223 Taccone Ave., Apt. 37, Medford, MA 02155. Rick is an elementary school teacher in the Medford Public School system and Cindy is currently a homemaker after losing her job in late 2019. Cindy’s social security number is 412-34-5671 (date of birth 10/11/1981) and Rick’s is 412-34-5670 (date of birth 3/19/1979). Rick’s W-2 contained the following information: Wages (box 1) = $ 70,245.55 Federal W/H (box 2) = $ 5,924.43 Social security wages (box 3) = $ 70,245.55 Social security W/H (box 4) = $ 4,355.22 Medicare wages (box 5) = $ 70,245.55 Medicare W/H (box 6) = $ 1,018.56 Rick and Cindy have interest income of $237 from a savings account at Boston State Bank. Cindy also owns stock in Microsoft. Cindy received $265 in qualified dividends from Microsoft in 2020. Rick was divorced in 2014 and pays his ex-wife (Mary Tortelli) alimony. Their original divorce decree, which remains unchanged, dictates…arrow_forwardRick and Cindy Davis are married and file a joint return. They live at 3223 Taccone Ave., Apt. 37, Medford, MA 02155. Rick is an elementary school teacher in the Medford Public School system and Cindy is currently a homemaker after losing her job in late 2019. Cindy’s social security number is 412-34-5671 (date of birth 10/11/1981) and Rick’s is 412-34-5670 (date of birth 3/19/1979). Rick’s W-2 contained the following information: Wages (box 1) = $ 70,245.55 Federal W/H (box 2) = $ 5,924.43 Social security wages (box 3) = $ 70,245.55 Social security W/H (box 4) = $ 4,355.22 Medicare wages (box 5) = $ 70,245.55 Medicare W/H (box 6) = $ 1,018.56 Rick and Cindy have interest income of $237 from a savings account at Boston State Bank. Cindy also owns stock in Microsoft. Cindy received $265 in qualified dividends from Microsoft in 2020. Rick was divorced in 2014 and pays his ex-wife (Mary Tortelli) alimony. Their original divorce decree, which remains unchanged, dictates that Rick pay Mary…arrow_forwardBert Baker and Ernestine Moffet were never formally married but have lived together as husband and wife for the last 14 years. Bert and Ernestine reside in Washington, D.C., a jurisdiction that recognizes common law marriages as valid. Consequently, they filed both a joint district income tax return and a joint federal income tax return for the last eight years. Bert and Ernestine are planning to move their household to Frederick, Maryland, and become permanent residents of that state. Maryland doesn’t recognize common law marriages. Will Bert and Ernestine’s change in residence allow them to avoid the marriage penalty by filing as single individuals?arrow_forward
- PK was ordered to pay Sangita $15,000 from his RRSP as part of their divorce settlement. Sangita transferred the amount directly from PK's RRSP into her RRIF. Shortly after his divorce, PK married Yasmin, who received $10,000 as a refund of premiums from her late husband's unmatured RRSP. Yasmin received the $10,000 in cash on July 1st of her husband's death and she deposited the entire amount into her bank account. In February of the next year, she transferred the $10,000 into her RRIF. Who must pay income tax on the funds removed from the RRSPs?arrow_forwardHerb and Alice are married and file a joint return. Herb is 74 years old and Alice is 70. Neither are blind. Both Herb and Alice are retired. Herb works part time as a greeter. Herb earned $15,000 in wages. They also received Social Security benefits of $44,000. Theyreceived no other income in 2022. Both Herb and Alice are U.S. citizens, lived in the United States all year, and have valid SocialSecurity numbers. They do not have any qualifying children, and no one else lives with them. What is Herb and Alice’s standard deduction? $___________ (T/F)The taxable amount of Herb and Alice’s Social Security is $2,500. True or Falsearrow_forwardAlton Newman, age 67, is married and files a joint return with his wife, Clair, age 65. Alton and Clair are both retired, and during 2019, they received Social Security benefits of $10,000. Both Alton and Clair are covered by Medicare. Alton's Social Security number is 111-11-1119, and Clair's is 123-45-6786. They reside at 210 College Drive, Columbia, SC 29201. Alton, who retired on January 1, 2019, receives benefits from a qualified pension plan of $2,750 a month for life. His total contributions to the plan (none of which were deductible) were $168,250. In January 2019, he received a bonus of $2,000 from his former employer for service performed in 2018. No income taxes were withheld on this bonus by his former employer (Amalgamated Industries, Inc.; EIN 12-3456789; 114 Main Street, Columbia, SC 29201). Although Amalgamated Industries, Inc., accrued the bonus in 2018, it was not paid until 2019. Clair, who retired on December 31, 2018, started receiving benefits of $1,400 a month on…arrow_forward
- Alton Newman, age 67, is married and files a joint return with his wife, Clair, age 65. Alton and Clair are both retired, and during 2018, they received Social Security benefits of $10,000. Both Alton and Clair are covered by Medicare. Alton’s Social Security number is 111-11-1119, and Clair’s is 123-45-6786. They reside at 210 College Drive, Columbia, SC 29201.Alton, who retired on January 1, 2018, receives benefits from a qualified pension plan of $2,750 a month for life. His total contributions to the plan (none of which were deductible) were $168,250. In January 2018, he received a bonus of $2,000 from his former employer for service performed in 2017. No income taxes were withheld on this bonus by his former employer (Amalgamated Industries, Inc.; EIN 12-3456789; 114 Main Street, Columbia, SC 29201). Although Amalgamated Indus-tries, Inc., accrued the bonus in 2017, it was not paid until 2018.Clair, who retired on December 31, 2017, started receiving benefits of $1,400 a month on…arrow_forwardAlton Newman, age 67, is married and files a joint return with his wife, Clair, age 65. Alton and Clair are both retired, and during 2018, they received Social Security benefits of $10,000. Both Alton and Clair are covered by Medicare. Alton’s Social Security number is 111-11-1119, and Clair’s is 123-45-6786. They reside at 210 College Drive, Columbia, SC 29201. Alton, who retired on January 1, 2018, receives benefits from a qualified pension plan of $2,750 a month for life. His total contributions to the plan (none of which were deductible) were $168,250. In January 2018, he received a bonus of $2,000 from his former employer for service performed in 2017. No income taxes were withheld on this bonus by his former employer (Amalgamated Industries, Inc.; EIN 12-3456789; 114 Main Street, Columbia, SC 29201). Although Amalgamated Indus-tries, Inc., accrued the bonus in 2017, it was not paid until 2018. Clair, who retired on December 31, 2017, started receiving benefits of $1,400 a month…arrow_forwardAlton Newman, age 67, is married and files a joint return with his wife, Clair, age 65. Alton and Clair are both retired, and during 2018, they received Social Security benefits of $10,000. Both Alton and Clair are covered by Medicare. Alton’s Social Security number is 111-11-1119, and Clair’s is 123-45-6786. They reside at 210 College Drive, Columbia, SC 29201. Alton, who retired on January 1, 2018, receives benefits from a qualified pension plan of $2,750 a month for life. His total contributions to the plan (none of which were deductible) were $168,250. In January 2018, he received a bonus of $2,000 from his former employer for service performed in 2017. No income taxes were withheld on this bonus by his former employer (Amalgamated Industries, Inc.; EIN 12-3456789; 114 Main Street, Columbia, SC 29201). Although Amalgamated Indus-tries, Inc., accrued the bonus in 2017, it was not paid until 2018.Clair, who retired on December 31, 2017, started receiving benefits of $1,400 a month on…arrow_forward
- Marc and Michelle are married and earned salaries this year of $65,600 and $12,600, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $700 from corporate bonds. Marc contributed $2,700 to a traditional individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,700 (under a divorce decree effective June 1, 2006). Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $3,000 child tax credit for Matthew. Marc and Michelle paid $6,400 of expenditures that qualify as itemized deductions (no charitable contributions) and they had a total of $3,105 in federal income taxes withheld from their paychecks during the year. What is the total amount of Marc and Michelle’s deductions from AGI?arrow_forwardanice and Edwin Murtaugh are a married couple who file a joint return. Janice is 62 and Edwin is 66 years old. What is the total amount of their applicable standard deduction?arrow_forwardMarc and Mikkel are married and earned salaries this year of $64,000 and $12,000, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $500 from corporate bonds. Marc contributed $2,500 to a traditional individual retirement account, and Marc paid alimony to a prior spouse in the amount of $1,500 (under a divorce decree effective June 1, 2006). Marc and Mikkel have a 10-year-old adopted son, Mason, who lived with them throughout the entire year. Thus, Marc and Mikkel are allowed to claim a $2,000 child tax credit for Mason. Marc and Mikkel paid $6,000 of expenditures that qualify as itemized deductions, and they had a total of $2,500 in federal income taxes withheld from their paychecks during the year. (Use the tax rate schedules for 2022) Complete Schedule 1 of Form 1040 for Marc and Mikkel.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:9780357109731
Author:Hoffman
Publisher:CENGAGE LEARNING - CONSIGNMENT
How to Calculate your Income Tax? Step-by-Step Guide for Income Tax Calculation; Author: ETMONEY;https://www.youtube.com/watch?v=QdJKpSXCYmQ;License: Standard YouTube License, CC-BY
How to Calculate Federal Income Tax; Author: Edspira;https://www.youtube.com/watch?v=2LrvRqOEYk8;License: Standard Youtube License