Tax Project #1 Spring 2021 Peter and Jane Johnson have been married for 15 years and...
Fantastic news! We've Found the answer you've been seeking!
Transcribed Image Text:
Tax Project #1 Spring 2021 Peter and Jane Johnson have been married for 15 years and have three children who qualify as their dependents (John, Sarah and Michael). The couple received salary income of 200,000, qualified business income of $20,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $300,000 and they sold it for $420,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $19,500 of itemized deductions and they had $12,050 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Michael is 18 years of age, the Johnsons may only claim the child tax credit for other qualifying dependents. d. What would their taxable income be if they had S0 itemized deductions and $6,000 of for AGI deductions? e. Assume the original facts but now suppose the Jacksons also incurred a loss of $5,000 on the sale of some of their investment assets. What effect does the $5,000 loss have on their taxable income? f. Assume the original facts but now suppose the Jacksons own investments that appreciated by $10,000 during the year. The Jacksons believe the investments will continue to appreciate, so they did not sell the investments during this year. What is the Jacksons' taxable income? Tax Project #1 Spring 2021 Peter and Jane Johnson have been married for 15 years and have three children who qualify as their dependents (John, Sarah and Michael). The couple received salary income of 200,000, qualified business income of $20,000 from an investment in a partnership, and they sold their home this year. They initially purchased the home three years ago for $300,000 and they sold it for $420,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $19,500 of itemized deductions and they had $12,050 withheld from their paychecks for federal taxes. They are also allowed to claim a child tax credit for each of their children. However, because Michael is 18 years of age, the Johnsons may only claim the child tax credit for other qualifying dependents. d. What would their taxable income be if they had S0 itemized deductions and $6,000 of for AGI deductions? e. Assume the original facts but now suppose the Jacksons also incurred a loss of $5,000 on the sale of some of their investment assets. What effect does the $5,000 loss have on their taxable income? f. Assume the original facts but now suppose the Jacksons own investments that appreciated by $10,000 during the year. The Jacksons believe the investments will continue to appreciate, so they did not sell the investments during this year. What is the Jacksons' taxable income?
Expert Answer:
Answer rating: 100% (QA)
d Their taxable income would be 181950 e The 5000 loss would reduce their taxable in... View the full answer
Related Book For
Income Tax Fundamentals 2014
ISBN: 9781285424545
32nd edition
Authors: Gerald E. Whittenburg, Martha Altus-Buller, Steven Gill
Posted Date:
Students also viewed these accounting questions
-
Aisha and Abraham have been married for 15 years. They have just separated. Using the following facts, a. Calculate the net family property of each spouse. b. Calculate the equalization payment and...
-
Harry and Ginny Potter have been married for 24 years and have three children who qualify as their dependents (Albus, 4; James, 16; and Lily, 19). The couple received salary income of $265,000 and...
-
Bev and Ken Hair have been married for 3 years. They live at 3567 River Street, Springfield, MO 63126. Ken is a full-time student at Southwest Missouri State University (SMSU) and Bev works as an...
-
Below are the Statements of Comprehensive Income of A and B Companies for 2020. A's Statement of Comprehensive Income was prepared before it reported its share of B's income. A uses the equity...
-
Debtors increase by 15,000 and creditors increase by 11,000. The effect on cash flow of the change in working capital is an: c) decrease of 4,000
-
When should RMA be addressed on a project?
-
The adjusted trial balance shows a. amounts that may be out of balance. b. revenues and expenses only. C. assets, liabilities, and common stock only, d. amounts that are ready for the financial...
-
In Problem Sl-5 assume that Nicole, with the help of a financial newsletter and some library research, has been able to assign probabilities to each of the possible interest rates during the next...
-
The All Seasonings Company uses 400 glass jars per hour. The waiting time for a standard container, which holds 90 jars, averages 0.75 hour. If management uses a safety factor of twenty percent, how...
-
Capstone Case: Sunrise Bakery Expansion The Sunrise Bakery Corporation was originally founded in Houston, TX in 1991 by Griffin Harris, who currently serves as the company's Chief Executive Officer....
-
In March 2019, Dale and Lee, senior managers from technology firms, were attending an executive education programFinancial Management for Non-Financial Executivesat a highly-regarded business school....
-
Which of the following statements is true of actors? (i) One person cannot be a number of different actors. (ii) Use cases are initiated by actors. (iii) An actor is an instance of a class. (iv) An...
-
Identify each of the distinct ways in which an actor can interact with the system. (i) An actor can input information into the system (ii) An actor can receive information from the system (iii) An...
-
Are behavioral diagrams a must? Why?
-
Briefly explain why a firm in a perfectly competitive market would generally face a horizontal demand curve. What implications do you think this has for the price of its product?
-
What are the constructs available in UML to support object oriented paradigms like inheritance, polymorphism and data abstraction?
-
Record all employer's payroll expenses and liabilities for the month of July.
-
Use of the contraceptive Depo Provera appears to triple women's risk of infection with chlamydia and gonorrhea , a study reports today. An estimated 20 million to 30 million women worldwide use Depo...
-
The following additional information is available for the Dr. Ivan and Irene Incisor family from Chapters 1 and 2. On September 1, Irene opened a retail store that specializes in sports car...
-
Kent Pham, CPA, is a 45-year-old single taxpayer living at 169 Trendie Street, La Jolla, CA 92037. His Social Security number is 865-68-9635. In 2013, Kent's W-2 as the controller of a local...
-
How are qualified dividends taxed in 2013? Please give the three rates of tax which apply to qualified dividends, and specify when each of these rates applies.
-
Which of the following is not true in relation to leases? (a) An operating lease is where the lessee effectively retains the risks and rewards of owning an asset. (b) An operating lease is where the...
-
Which of the following is true with regard to contingent liabilities? (a) Can be measured reliably. (b) Are recognised in the statement of financial position. (c) Are disclosed in the notes to the...
-
The entry to account for the lease payment accrual at the end of the period in the records of the lessee would be: (a) No accrual required, the transaction would be recorded on the date the lease...
Study smarter with the SolutionInn App