What is the Tax return? Tom and Megan Brown are married with three children, all of whom

What is the Tax return? 

  

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Tom and Megan Brown are married with three children, all of whom live at home. The children are ages 18, 15, and 8. a. Tom is a loan officer at First Lubbock Bank and his annual salary is $100,010. Federal withholding was $17,131. b. First Lubbock provides employees with free group-term life insurance equal to their annual gross salary, up to $50,000, and free health and accident insurance. Tom's health and accident insurance cost First Lubbock $3,500. The bank's cost of his group-term life insurance coverage is $700. The bank also provides whole life insurance for all officers. The cost of the whole life insurance is $2,750. c. The company also provides Tom with a membership to Lubbock Golf Club. The dues total $6,000 per year. d. In June, Tom was recognized for being with the bank for 20 years. Tom received a watch worth $300 and $1,500 cash. e. Megan lost her job in January last year. She received unemployment compensation totaling $21,720. f. In October, Tom was in a car accident. He received $155,000 for pain and suffering and $20,000 in punitive damages. g. The Brown's two oldest children are from Megan's first marriage. (The Browns claim all 3 children as dependents.) Megan continues to receive alimony and child support. Alimony totaled $3,000 and child support totaled $9,000. The divorce was finalized in 2012. h. The Browns received interest income of $937 from a savings account, $611 from a US Treasury bond and $423 from bond issued by the City of Lubbock. Also during the year, Megan received a cash gift of $20,000 from her parents. j. The couple sold their home during and purchased a new one. The couple had owned and lived in the home for 8 years. The house sold for $500,000 and their basis in the property was $225,000. k. Tom won $5,900 at a slot machine in Las Vegas. 1. In the prior tax year, Megan had New Mexico earnings so they had to file a state return. On their federal tax return, the Browns took a $2,732 deduction for state taxes paid. The Browns did itemize their deductions that year (itemized deductions equaled 27,950). They received a $364 refund from state income tax paid. m. Megan is a 25% partner in XYZ partnership. Her share of income was $22,196. She received a distribution of $16,000. n. Tom purchased 900 shares of ABC stock at the beginning of the year for $17.50 per share. The stock is currently trading at $12.75 per share. The shares did pay dividends of $1.50 per share on December 1.. Tom and Megan Brown are married with three children, all of whom live at home. The children are ages 18, 15, and 8. a. Tom is a loan officer at First Lubbock Bank and his annual salary is $100,010. Federal withholding was $17,131. b. First Lubbock provides employees with free group-term life insurance equal to their annual gross salary, up to $50,000, and free health and accident insurance. Tom's health and accident insurance cost First Lubbock $3,500. The bank's cost of his group-term life insurance coverage is $700. The bank also provides whole life insurance for all officers. The cost of the whole life insurance is $2,750. c. The company also provides Tom with a membership to Lubbock Golf Club. The dues total $6,000 per year. d. In June, Tom was recognized for being with the bank for 20 years. Tom received a watch worth $300 and $1,500 cash. e. Megan lost her job in January last year. She received unemployment compensation totaling $21,720. f. In October, Tom was in a car accident. He received $155,000 for pain and suffering and $20,000 in punitive damages. g. The Brown's two oldest children are from Megan's first marriage. (The Browns claim all 3 children as dependents.) Megan continues to receive alimony and child support. Alimony totaled $3,000 and child support totaled $9,000. The divorce was finalized in 2012. h. The Browns received interest income of $937 from a savings account, $611 from a US Treasury bond and $423 from bond issued by the City of Lubbock. Also during the year, Megan received a cash gift of $20,000 from her parents. j. The couple sold their home during and purchased a new one. The couple had owned and lived in the home for 8 years. The house sold for $500,000 and their basis in the property was $225,000. k. Tom won $5,900 at a slot machine in Las Vegas. 1. In the prior tax year, Megan had New Mexico earnings so they had to file a state return. On their federal tax return, the Browns took a $2,732 deduction for state taxes paid. The Browns did itemize their deductions that year (itemized deductions equaled 27,950). They received a $364 refund from state income tax paid. m. Megan is a 25% partner in XYZ partnership. Her share of income was $22,196. She received a distribution of $16,000. n. Tom purchased 900 shares of ABC stock at the beginning of the year for $17.50 per share. The stock is currently trading at $12.75 per share. The shares did pay dividends of $1.50 per share on December 1..

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