Martin is 39 years old and is married to Michele who is 36. They have two children,
Question:
Martin is 39 years old and is married to Michele who is 36. They have two children, Charlene, age 9, and Jordan, age 19. Jordan is a full time student and does not work. She has a scholarship of $9,000 for 2023. Her total living expenses are $16,000. Her parents pay for all expenses not taken care of by the scholarship. Martin's sister Lisa, age 30, lives with them also. Lisa did not work in 2023. She received $7,000 in an inheritance from her great aunt this year. She uses all the money for support. Martin and Michele provide her $6,000 for support and Lisa's mother gives her $5,000 for support. Martin and
Michele had the following transactions in 2023:
Martin received $120,000 in salary from Red Steel
Corporation, where he is a construction engineer.
Michele received $80,000 in salary from the university where she works as a professor.
Martin and Michele received $800 in qualified dividends and $400 interest from Montgomery County school bonds.
Martin received $2,300 in interest from his savings account.
Martin and Michele have QBI of $10,000.
Michele had a capital loss of $4,000 in 2023.
Michele received land in an inheritance from her dad with an adjusted basis and FMV of $12,000 on May 1, 2023.
Michele's dad gave her $10,000 as a gift.
Martin paid $6,600 in alimony to his former wife (divorced before 2018).
Martin and Michele paid $5,100 in state income taxes, $5,700 in real estate taxes, medical expenses of $9,000, and $6,500 in qualified mortgage interest.
Martin and Michele made contributions to the church totaling $12,000.
Answer the following questions:
a. How many dependents do Martin and Michele have?
b. What is their gross income? (list items in gross income )
C. What is their adjusted income? (list for AGI deductions )
d. What is their taxable income?(list from AGI items )
e. What is their tax liability for 2023?(show calculation )
Use this image for Question E
South Western Federal Taxation 2015
ISBN: 9781305310810
38th Edition
Authors: William H. Hoffman, William A. Raabe, David M. Maloney, James C. Young