J borrowed money to buy Birmingham, AL, municipal bonds. This year he paid $2,000 of interest on the loan, and earned $3,500 interest income from the bonds. $2,000 of the interest qualifies to be deducted this year as investment interest expense.

In 2020, Amanda, age 32, reports Schedule C income = $70,000 and self-employment tax = $9,891. What is the maximum amount she may contribute to a qualified Keogh self-employed retirement plan?

Tracy paid the following taxes this year: Federal income tax $12,034 Employee payroll tax (FICA and Medicare) $4,590 State income tax $5,725 State and local sales tax $2,998 Local property tax on personal residence $3,300 What is Tracy’s itemized deduction for taxes?

Gains realized on the sale of personal use assets are generally taxable.

Mr. and Mrs. Darwin sold their principal residence on September 12, 2019, and purchased and moved into a new residence three weeks later. They excluded their $353,000 gain realized on this sale from gross income. On October 2, 2020, the Darwins realized a gain on sale of the new residence. Which of the following statements about this second gain is true?

Sara owns stock in two S Corporations, MK and RI, and materially participates in both businesses. Her income and loss for the year are as follows: Salary $113,700; her share of MK income $42,000; her share of RI loss $(28,000). What is Sara’s AGI?

Sandy bought stock on April 16, 2019, and found out on January 12, 2020, that the stock had become worthless. Sandy has a long-term capital loss.

This year, Mr. and Mrs. Franklin paid $93,000 interest on a mortgage incurred in 2008 to build their home in Santa Fe. The average principal balance of the mortgage was $1.43 million. Compute the Franklins’ itemized deduction for their home mortgage interest.

Tina has a marginal income tax rate = 22%. She sold four investment assets resulting in the following capital gains and losses: Short-term gain = $3,800, Short-term loss = $(5,000) Long-term gain = $39,000,  Long-term loss = $(35,100) How much net capital gain is taxed at a preferential rate?

Sara owns stock in two S Corporations, MK and RI, and materially participates in both businesses. Her income and loss for the year are as follows: Salary $113,700; her share of MK income $42,000; her share of RI loss $(28,000). What is Sara’s AGI?