Comprehensive
\nProblems
\n67. This year Evan graduated from college, and
\ntook a job as a deliveryman in the city.
\nEvan was paid a salary of $68,500 and he received $700 in hourly pay for
\npart-time work over the weekends. Evan
\nsummarized his expenses below.
\n Cost of moving his possessions
\nto the city (125 miles away)$ 1,200
\n Interest paid on accumulated
\nstudent loans 2,800
\n Cost of purchasing a
\ndelivery uniform 1,400
\n Contribution to State
\nUniversity deliveryman program 1,300
\nCalculate
\nEvan\u00e2\u0080\u0099s AGI and taxable income if
\nhe files single with one personal exemption. Assume that interest payments were
\ninitially required on Evan\u00e2\u0080\u0099s student loans this year.<\/p>\n
68. {Tax
\nForms} Read the following letter and help Shady Slim with his tax
\nsituation. Please assume that gross
\nincome is $172,900 for purposes of this problem.
\nDecember 31, 2014
\nTo the friendly
\nstudent tax preparer:
\nHi, it\u00e2\u0080\u0099s Shady Slim again. I just got
\nback from my 55th birthday party, and I\u00e2\u0080\u0099m told that you need some
\nmore information from me in order to complete my tax return. I\u00e2\u0080\u0099m an open
\nbook! I\u00e2\u0080\u0099ll tell you whatever I think you
\nneed to know.
\nLet me tell you a few more things about
\nmy life. As you may recall, I am divorced from my wife, Alice. I know that it\u00e2\u0080\u0099s
\nunusual, but I have custody of my son, Shady, Jr. The judge owed me a few
\nfavors and I really love the kid. He lives with me full-time and my wife gets
\nhim every other weekend. I pay the vast majority of my son\u00e2\u0080\u0099s expenses. I think
\nAlice should have to pay some child support, but she doesn\u00e2\u0080\u0099t have to pay a
\ndime. The judge didn\u00e2\u0080\u0099t owe me that much, I guess.
\nI had to move this year after getting my
\njob at Roca Cola. We moved on February 3 of this year, and I worked my job at
\nRoca Cola for the rest of the year. I still live in the same state, but I moved
\n500 miles away from my old house. I left a little bit early to go on a
\nhouse-hunting trip that cost me a total of $450. I hired a moving company to
\nmove our stuff at a cost of $2,300. Junior and I got a hotel room along the way
\nthat cost us $42 (I love Super 8!). We spent $35 on meals on the way to our new
\nhome. Oh yeah, I took Junior to a movie on the way and that cost $20.
\nCan you believe I\u00e2\u0080\u0099m still paying off my
\nstudent loans, even after 15 years? I
\npaid a total of $900 in interest on my old student loans this year.
\nRemember when I told you about that guy
\nthat hit me with his car? I had a bunch
\nof medical expenses that were not reimbursed by the lawsuit or by my insurance.
\nI incurred a total of $20,000 in medical expenses, and I was only reimbursed
\nfor $11,000. Good thing I can write off medical expenses, right?
\nI contributed a lot of money to charity
\nthis year (and have receipt documentation for all contributions). I\u00e2\u0080\u0099m such a
\nnice guy! I gave $1,000 in cash to the
\nMarch of Dimes. I contributed some of my old furniture to the church. It was
\nsome good stuff! I contributed a red
\nvelvet couch and my old recliner. The
\nfurniture is considered vintage and is worth $5,000 today (the appraiser
\nsurprised me!), even though I only paid $1,000 for it back in the day. When I
\ncontributed the furniture, the pastor said he didn\u00e2\u0080\u0099t like the fabric and was
\ngoing to sell the furniture to pay for some more pews in the church. Some people
\njust have no taste, right? Roca Cola had
\na charity drive this year and I contributed $90. Turns out, I don\u00e2\u0080\u0099t even miss it, because Roca
\nCola takes it right off my paycheck every month\u00e2\u0080\u00a6$15 a month starting in July.
\nOh, one other bit of charity from me this year. An old buddy of mine was down
\non his luck. He lost his job and his house. I gave him $500 to help him out.
\nI paid a lot of money in interest this
\nyear. I paid a total of $950 in personal credit card interest. I also paid
\n$13,000 in interest on my home mortgage. I also paid $2,000 in real estate
\ntaxes for my new house.
\nA few other things I want to tell you
\nabout last year. Someone broke into my house and stole my kid\u00e2\u0080\u0099s brand new
\nbicycle and my set of golf clubs. The total loss from theft was $900. I paid
\n$100 in union dues this year. I had to pay $1,000 for new suits for my job.
\nRoca Cola requires its managers to wear suits every day on the job. I spent a
\ntotal of $1,300 to pay for gas to commute to my job this year.
\nOh, this is pretty cool. I\u00e2\u0080\u0099ve always
\nwanted to be a firefighter. I spent $1,000 in tuition to go to the local
\nfirefighter\u00e2\u0080\u0099s school. I did this because someone told me that I can deduct the
\ntuition as an itemized deduction, so the money would be coming back to me.
\nThat should be all the information you
\nneed right now. Please calculate my taxable income and complete pages 1 and 2
\nof Form 1040 (through taxable income, line 43) and Schedule A. You\u00e2\u0080\u0099re still
\ndoing this for free, right?
\n69. Jeremy and Alyssa Johnson have been married
\nfor five years and do not have any children.
\nJeremy was married previously and has one child from the prior
\nmarriage. He is self-employed and
\noperates his own computer repair store.
\nFor the first two months of this year, Alyssa worked for Staples, Inc.
\nas an employee. In March, Alyssa
\naccepted a new job with Super Toys, Inc. (ST) where she worked for the
\nremainder of the year. This year the Johnsons
\nreceived $255,000 of gross income.
\nDetermine the Johnson\u00e2\u0080\u0099s AGI
\ngiven the following information (assume the 2013 rules apply for purposes of
\nthe qualified education expense deduction):<\/p>\n
a. Expenses associated with Jeremy\u00e2\u0080\u0099s store
\ninclude $40,000 in salary (and employment taxes) to employees, $45,000 of supplies,
\nand $18,000 in rent and other administrative expenses.
\nb. As a salesperson, Alyssa incurred $2,000
\nin travel expenses related to her employment that were not reimbursed by her
\nemployer.
\nc. The Johnsons own a piece of investment
\nreal estate. They paid $500 of real
\nproperty taxes on the property and they incurred $200 of expenses in travel
\ncosts to see the property and to evaluate other similar potential investment
\nproperties.
\nd. The Johnsons own a rental home. They incurred $8,500 of expenses associated
\nwith the property.
\ne. The Johnson\u00e2\u0080\u0099s home was only five miles
\nfrom the Staples store where Alyssa worked in January and February. The ST store was 60 miles from their home, so
\nthe Johnsons decided to move to make the commute easier for Alyssa. The Johnson\u00e2\u0080\u0099s new home was only ten miles
\nfrom the ST store. However, it was 50
\nmiles from their former residence. The
\nJohnsons paid a moving company $2,000 to move their possessions to the new
\nlocation. They also drove the 50 miles
\nto their new residence. They stopped
\nalong the way for lunch and spent $60 eating at Denny\u00e2\u0080\u0099s. None of the moving expenses were reimbursed
\nby ST.
\nf. Jeremy paid $4,500 for health insurance
\ncoverage for himself (not through an exchange).
\nAlyssa was covered by health plans provided by her employer, but Jeremy
\nis not eligible for the plan until next year.
\ng. Jeremy paid $2,500 in self-employment
\ntaxes ($1,250 represents the employer portion of the self-employment taxes).
\nh. Jeremy paid $5,000 in alimony and $3,000
\nin child support from his prior marriage.
\ni. Alyssa paid $3,100 of tuition and fees
\nto attend night classes at a local university.
\nThe Johnsons would like to deduct as much of this expenditure as
\npossible rather than claim a credit.
\nj. The Johnsons donated $2,000 to their
\nfavorite charity.<\/p>\n
70. {Tax Forms} Shauna Coleman is single. She works as an architectural designer for
\nStreamline Design (SD). Shauna wanted to determine her taxable income. She correctly calculated her AGI.
\nHowever, she wasn\u00e2\u0080\u0099t sure how to compute the rest of her taxable
\nincome. She provided the following
\ninformation with hopes that you could use it to determine her taxable income.<\/p>\n
a. Shauna
\npaid $4,675 for medical expenses and Blake, Shauna\u00e2\u0080\u0099s boyfriend, drove Shauna
\n(in her car) a total of 115 miles so that she could receive care for a broken
\nankle she sustained in a biking accident.<\/p>\n
b. Shauna
\npaid a total of $3,400 in health insurance premiums during the year (not
\nthrough an exchange). SD did not
\nreimburse any of this expense. Besides
\nthe health insurance premiums and the medical expenses for her broken ankle,
\nShauna had Lasik eye surgery last year and she paid $3,000 for the surgery (she
\nreceived no insurance reimbursement).
\nShe also incurred $450 of other medical expenses for the year.
\nc. SD
\nwithheld $1,800 of state income tax, $7,495 of Social Security tax, and $14,500
\nof federal income tax from Shauna\u00e2\u0080\u0099s paychecks throughout the year.
\nd. In
\n2014, Shauna was due a refund of $250 for overpaying her 2013 state taxes. On her 2013 state tax return that she filed
\nin April of 2014, she applied the overpayment towards her 2014 state tax
\nliability. She estimated that her state
\ntax liability for 2014 will be $2,300.
\ne. Shauna
\npaid $3,200 of property taxes on her personal residence. She also paid $500 to the developer of her
\nsubdivision, because he had to replace the sidewalk in certain areas of the
\nsubdivision.
\nf. Shauna
\npaid a $200 property tax based on the state\u00e2\u0080\u0099s estimate of the value of her car.
\ng. Shauna
\nhas a home mortgage loan in the amount of $220,000 that she secured when she
\npurchased the home. The home is worth
\nabout $400,000. Shauna paid interest of
\n$12,300 in interest on the loan this year.
\nh. Shauna
\nmade several charitable contributions throughout the year. She contributed stock in ZYX Corp. to the Red
\nCross. On the date of the contribution,
\nthe FMV of the donated shares was $1,000 and her basis in the shares was
\n$400. Shauna originally bought the ZYX
\nCorp. stock in 2008. Shauna also contributed $300 cash to State University and
\nreligious artifacts she has held for several years to her church. The artifacts were valued at $500 and
\nShauna\u00e2\u0080\u0099s basis in the items was $300.
\nShauna had every reason to believe the church would keep them on display
\nindefinitely. Shauna also drove 200
\nmiles doing church-related errands for her minister. Finally, Shauna contributed $1,200 of
\nservices to her church last year.
\ni. Shauna\u00e2\u0080\u0099s
\ncar was totaled in a wreck in January. The car was worth $14,000 and her cost
\nbasis in the car was $16,000. The car
\nwas a complete loss. Shauna received
\n$2,000 in insurance reimbursements for the loss.
\nj. Shauna
\npaid $300 for architectural design publications, $100 for continuing education
\ncourses to keep her up to date on the latest design technology, and $200 for
\nprofessional dues to maintain her status in a professional designer\u00e2\u0080\u0099s
\norganization.
\nk. Shauna
\npaid $250 in investment advisory fees and another $150 to have her tax return
\nprepared (that is, she paid $150 in 2014 to have her 2013 tax return prepared).
\nl. Shauna
\nis involved in horse racing as a hobby.
\nDuring the year, she won $2,500 in prize money and incurred $10,000 in
\nexpenses. She has never had a profitable
\nyear with her horse racing activities, so she acknowledges that this is a hobby
\nfor federal income tax purposes.
\nm. Shauna
\nsustained $2,000 in gambling losses over the year (mostly horse-racing bets)
\nand only had $200 in winnings.
\nRequired:
\nA. Determine Shauna\u00e2\u0080\u0099s taxable income and
\ncomplete page 2 of Form 1040 (through taxable income, line 43) and Schedule A
\nassuming her AGI is $107,000.
\nB. Determine Shauna\u00e2\u0080\u0099s taxable income and
\ncomplete page 2 of Form 1040 (through taxable income, line 43) and Schedule A
\nassuming her AGI is $207,000<\/p>\n
71. {Tax Forms} Joe and Jessie are married and
\nhave one dependent child, Lizzie. Lizzie
\nis currently in college at State University.
\nJoe works as a design engineer for a manufacturing firm while Jessie
\nruns a craft business from their home.
\nJessie\u00e2\u0080\u0099s craft business consists of making craft items for sale at craft
\nshows that are held periodically at various locations. Jessie spends considerable time and effort on
\nher craft business and it has been consistently profitable over the years. Joe and Jessie own a home and pay interest on
\ntheir home loan (balance of $220,000) and a personal loan to pay for Lizzie\u00e2\u0080\u0099s
\ncollege expenses (balance of $35,000).
\n Neither Joe nor Jessie is blind or
\nover age 65, and they plan to file as married-joint. Based on their estimates, determine Joe and
\nJessie\u00e2\u0080\u0099s AGI and taxable income
\nfor the year and complete pages 1 and 2 of Form 1040 (through taxable income,
\nline 43) and Schedule A. Assume the 2013 rules apply for purposes of the
\nqualified education expense deduction and that the employer portion of the
\nself-employment tax on Jessie\u00e2\u0080\u0099s income is $808. Joe and Jessie have summarized
\nthe income and expenses they expect to report this year as follows:<\/p>\n
Income:
\n Joe\u00e2\u0080\u0099s salary $ 119,100
\n Jessie\u00e2\u0080\u0099s
\ncraft sales 18,400
\n Interest
\nfrom certificate of deposit 1,650
\n Interest
\nfrom Treasury bond funds 727
\n Interest
\nfrom municipal bond funds 920
\n Expenditures:
\n Federal
\nincome tax withheld from Joe\u00e2\u0080\u0099s wages $ 13,700
\n State income
\ntax withheld from Joe\u00e2\u0080\u0099s wages 6,400
\n Social
\nSecurity tax withheld from Joe\u00e2\u0080\u0099s wages 7,482
\n Real estate
\ntaxes on residence 6,200
\n Automobile
\nlicenses (based on weight) 310
\n State sales
\ntax paid 1,150
\n Home
\nmortgage interest 14,000
\n Interest on
\nMasterdebt credit card 2,300
\n Medical
\nexpenses (unreimbursed) 1,690
\n Joe\u00e2\u0080\u0099s
\nemployee expenses (unreimbursed) 2,400
\n Cost of
\nJessie\u00e2\u0080\u0099s craft supplies 4,260
\n Postage for
\nmailing crafts 145
\n Travel and
\nlodging for craft shows 2,230
\n Meals during
\ncraft shows 670
\n Self-employment
\ntax on Jessie\u00e2\u0080\u0099s craft income 1,615
\n College
\ntuition paid for Lizzie 5,780
\n Interest on
\nloans to pay Lizzie\u00e2\u0080\u0099s tuition 3,200
\n Lizzie\u00e2\u0080\u0099s
\nroom and board at college 12,620
\n Cash
\ncontributions to Red Cross 525<\/p>\n","protected":false},"excerpt":{"rendered":"
Comprehensive Problems 67. This year Evan graduated from college, and took a job as a deliveryman in the city. Evan was paid a salary of\u2026<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[8827,10099,10540,10536,10892,10538,10539,10537,10891],"tags":[10549,10616,10615,7687,10627,8857,10552,10295,10548,10622,8907],"class_list":["post-130225","post","type-post","status-publish","format-standard","hentry","category-australia-essays","category-buy-essay","category-cheap-essay-writers","category-get-assignments-done","category-page-paper","category-phd-essay-writers","category-research-paper-writing-service-for-any-topic","category-study-bay-essay","category-write-my-assignment-ireland","tag-ai-plagiarism-free-essay-writing-tool","tag-australian-best-tutors","tag-best-trans-tutors","tag-buy-essay-uk","tag-cheap-dissertation-writer","tag-help-with-writing-an-essay","tag-help-write-my-paper-ai-free","tag-homework-for-you","tag-online-essay-writers","tag-phd-essays","tag-write-my-essay-for-me"],"_links":{"self":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/130225","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/comments?post=130225"}],"version-history":[{"count":0,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/posts\/130225\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/media?parent=130225"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/categories?post=130225"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.studyproessays.com\/help\/wp-json\/wp\/v2\/tags?post=130225"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}