I need help with this assignment please. For "Introduction to U.S. tax"

Question 2 (15 marks) Roxie and Logan were divorced in 2012. They have two children, nine-year-old Byron and 21-year-old Celeste. Byron lives with Roxie, and Celeste is attending university fulltime in Memphis. At the beginning of 2014, Roxie, with the court's permission, relocated to Memphis with Byron. She and Byron moved into a big house in Memphis at the beginning of 2014. Celeste gave up her campus apartment and moved into the house to help her mother save money. Roxie's mother's health has been declining, and Roxie moved her into the house to care for her. Roxie provides 65% of her mother's support. Roxie had a part-time job lined up before moving to Memphis. She earned $9,000 from this job in 2014. Her employer withheld $200 in federal taxes and $100 in state taxes. In April 2014, Roxie started caring for her landlord's mother for a few hours every day in lieu of paying rent of $1,500 per month. As part of her divorce settlement, Roxie received part of an investment portfolio. In 2014, she did not sell or acquire any investments, but she received $2,500 in interest from some municipal bonds, $2,100 in interest from corporate bonds, and $5,600 in qualified dividends. She receives $2,000 in alimony and $1,200 in child support every month from Logan. In accordance with their divorce agreement, Logan will pay for all costs associated with their children's education. Roxie paid $2,100 to a moving company to move her belongings to Memphis. She and Byron drove 980 miles from their old home to Memphis. On the way, she spent $350 for motels and $120 for food. Celeste paid $300 to move from her campus apartment, and Roxie paid a moving company $500 to move her mother into her home. Celeste earned $6,500 from her part-time job. She spent half of it on a cruise, and she is saving the rest to buy a car. Roxie's mother receives $4,500 in nontaxable social security benefits and $1,500 in qualified dividends. Required: a. Calculate Roxie's AGI. b. Calculate Roxie's taxable income. c. Calculate Roxie's tax liability or refund. (For this question, ignore any tax credits.) d. For any of the items that were not included in your calculations above, explain why TAXX 304 v13 Assignment 1 May 5/2015 they were not included. Question 3 (10 marks) Marvin's wife passed away from cancer in 2013, leaving him to care for their three preschool children. For 2014, Marvin has an AGI of $155,000 before considering the disposals below. His itemized deductions total $11,500. In 2014, Marvin sold the following stocks: Date Acquire d Date Sold Stock Shares Sold (#) Selling ($) Price/Share 10/28/02 02/14/1 4 06/02/13 Selling Acquisition ($) Costs ($) Price/Share Wilau Co. 1,800 $25 $2,500 $3 04/30/1 4 Retool Co. 500 35 500 56 08/31/13 07/06/1 4 Dark Ltd. 2,000 10 600 6 01/13/08 11/27/14 Light Co. 1,200 17 600 25 He sold his wife's stamp collection for $7,500. The basis of the collection was $4,000. In addition, Marvin sold a rental cottage that he and his wife had owned for many years, resulting in a $125,000 gain. For tax purposes, $70,000 of the gain qualifies as an unrecaptured Section 1250 gain. Marvin also had a yard sale to get rid of some of some furniture, knick-knacks, clothes, and books. He earned $1,500 from the sale, and he estimated that he had originally paid $10,000 for the goods. Required: Calculate Marvin's taxes payable. Be sure to show all your work. Question 4 (10 marks) Sonja is a single mother of two school-aged children. She receives monthly alimony of $900 and monthly child support of $1,000. She is thankful that over the four years that she has been divorced, her ex-husband has never been in arrears with his payments. Sonja works part-time and earned $8,000 in 2014. She operates a small business selling perfume at home parties and dreams of turning it into a multi-million-dollar business someday. To help finance her business, she sold some stocks that she had received as a TAXX 304 v13 Assignment 1 May 5/2015 gift from her parents many years ago. This sale resulted in a gain of $15,000. She knows that it takes money to make money and she is grateful that she has some inheritance money to fall back on. For 2014, the first year of her business, her records show the following: Sales Cost of goods sold Advertising and promotion Supplies Food and wine for parties Transportation costs Casual labor costs $66,000 53,500 25,000 10,000 3,500 1,500 2,500 In 2014, Sonja received $500 of interest on City of Atlanta bonds, $2,500 in dividends from Peachland Orchards, Ltd., and a $75,000 inheritance from her late sister. She also received refunds on her 2013 state and federal income taxes of $250 and $700, respectively. Sonja paid mortgage interest of $5,500, property taxes of $700, state taxes of $300, and medical expenses of $8,000 for her daughter. Sonya did not itemize her deductions last year. Required: a. Calculate Sonja's taxable income or loss for tax purposes for the year. Ignore any self-employment taxes. b. Calculate Sonja's NOL for the year. c. Explain what Sonja can do with the NOL. Question 5 (30 marks) Barry, 53, and Vera, 49, are married and are the parents of 22-year-old Julia, 20-year-old Gary, and three-year-old twins, Larry and Laura. They have provided the following information for 2014: Barry is a popular television weatherman. He earns a salary of $250,000 per year. In 2014, his employer withheld $46,000 in federal taxes and $11,000 in state income taxes. Barry is an active participant in his employer-sponsored pension plan. Barry builds upscale dog beds in his spare time. He started out building them for his own dogs, and then his friends wanted to buy them. He sells them online now. He finds building the dog beds relaxing. He has not made any profit over the years doing thishe just finds it enjoyable. He will probably pursue it to a greater extent when he retires. In 2014, he had sales of $35,000 and incurred the following expenses: TAXX 304 v13 Assignment 1 May 5/2015 Materials and supplies Shipping costs Workshop rental Website maintenance and promotional costs $23,800 6,500 7,200 1,500 Vera has just started a new career as a retirement coach. Her business is unincorporated. She earned gross revenues of $27,500 and incurred the following expenses: Office rent Trade journal subscriptions Advertising Supplies Professional development courses Seminar costs Donation to her mother's campaign to run for governor $12,000 300 2,000 1,500 900 2,400* 30,000 *These costs were incurred for two seminars that Vera held at retirement fairs. Laura has a speech defect for which her doctor referred her to a speech therapist. The therapist was paid $15,000 and these costs were not covered by insurance. During the year, Barry and Vera paid $9,000 in health insurance premiums and $800 in dental insurance premiums. Vera paid $5,500 for cataract surgery and Barry paid $7,500 for Botox injections and laser treatments to maintain his television image. Vera paid $3,000 for a dental implant. Her dental plan reimbursed her $2,200. Barry paid $6,500 to the veterinarian for cancer treatments for one of his dogs. Vera received a $125,000 cash inheritance from her late uncle. At the end of the year, Barry sold his shares in Shanna Ltd. for $9,000. He had purchased the shares 11 months earlier for $3,500. Around the same time, Vera sold her shares of Knoll Co. for $3,600. She had purchased the stock three years earlier for $14,900. Barry and Vera went to Reno for a weekend getaway. Barry won $35,000 playing poker, and Vera lost $10,000 at blackjack. Barry and Vera have a vacation home in Florida. During 2014, they used the vacation home for 30 days and rented it out for 200 days. The home stood empty for the rest of the year. They received $40,000 of rental revenue and incurred the following expenses: TAXX 304 v13 Assignment 1 May 5/2015 Mortgage interest Property taxes Utilities Repairs and maintenance Insurance Advertising Depreciation (maximum available) $18,000 4,500 4,800 3,900 2,100 1,000 13,900 As in the past, they will use the IRS method to allocate expenses. Barry and Vera also received the following in 2014: Dividends from Kate Corp. Interest from a savings account Interest from City of Portland bonds $6,000 2,700 15,800 Barry and Vera paid the following in 2014: Property taxes on house Credit card interest Donations to church State sales taxes $16,700 2,300 3,600 5,500 Julia is a full-time student at Daye College. She received a scholarship that covered all her tuition, books, and supplies. Her parents pay for her room and board and miscellaneous living expenses. To save money, Julia moves back to her parents' house during her summer breaks. In 2014, she earned $6,000 from her summer job. She has saved $4,000 of it for a new car and has spent the rest on clothes and entertainment. Gary is taking two night courses at the local community college. He does not know what kind of career he wants and is trying to \"find himself.\" In the meantime, he lives in an apartment with his cousin and his parents are happy to support him while he looks for himself. On occasion, he works for a moving company when it needs extra hands. In 2014, he earned $4,000 doing this. Barry and Vera plan to file a joint return, as usual. Required: a. Calculate Barry and Vera's AGI and taxable income. Ignore any self- employment taxes. For items that you have not included, explain why they have not been included. b. Both Barry and Vera want to make contributions to IRAs. Advise them as to what type of IRAs they are eligible to contribute to and the maximum amount, if any, TAXX 304 v13 Assignment 1 May 5/2015 that each of them may contribute. Question 6 (20 marks) Kyle Kincaid is the sole proprietor of Kyle's Cookies Plus. For 2014, Kyle provided the following information: Sales Cost of goods sold Interest expense on business loan Transportation expense Licenses and permits Utilities Wages for part- and full-time staff Advertising Supplies $1,500,000 847,300 11,500 28,700 3,800 9,700 297,600 150,000 4,900 Kyle started operations in 2013. He has acquired the following assets: Acquisition Date April 1, 2013 May 1, 2013 May 15, 2013 January 2, 2014 January 2, 2014 April 15, 2014 October 16, 2014 December 3, 2014 Asset* refrigeration unit (used) integrated cookie machine (new) packing machine (used) building (new) Land adaptor set for cookie machine (new) pastry machine (new) freezer (used) Cost $ 15,000 300,000 95,000 750,000 50,000 40,000 Recovery Period 3 years 10 years 7 years 325,000 50,000 10 years 7 years 5 years In 2013, Kyle did not elect into Section 179 and did not opt out of bonus depreciation. For 2014, Kyle wants to minimize taxes and will take the necessary elections. Kyle did not pay himself a salary. Kyle's wife, Carly, earned $60,000 in salary and commissions from her sales job. Her employer withheld $2,700 in state income taxes and $8,900 in federal income taxes. Kyle and Carly received $15,200 in dividends from Atlantic Peach Co. and $23,800 in interest from municipal bonds. They made the following expenditures: Medical bills for their infant daughter Property taxes State income tax installments paid TAXX 304 v13 $43,000 7,600 5,500 Assignment 1 May 5/2015 Federal tax installments paid Charitable contributions 17,600 1,500 Carly is the sole supporter of her elderly aunt who lives in a nearby nursing home. Required: Kyle and Carly want to minimize their taxes. Calculate their taxable income or loss for tax purposes. For this calculation, ignore any self-employment taxes. Be sure to show all your work. TAXX 304 v13 Assignment 1 May 5/2015