Gains realized on the sale of personal use assets are generally taxable.
Mr. and Mrs. Darwin sold their principal residence on Septem…
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 materi…
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 Janua…
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…
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 inv…
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 materi…
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?
The Hills received $40,000 Social Security benefits this yea…
The Hills received $40,000 Social Security benefits this year. They also received $58,000 taxable pension payments and earned $17,300 interest and dividends from their investment portfolio. How much of the Hills’ social security is included in gross income?
Mr. Smith, age 40 and single, has AGI of $128,800, of which…
Mr. Smith, age 40 and single, has AGI of $128,800, of which $108,200 is compensation. What is the maximum he can contribute to a 2020 Roth IRA (round to 2 digits after decimal point)?
Lori’s marginal income tax rate is 24%, and her FICA/medicar…
Lori’s marginal income tax rate is 24%, and her FICA/medicare tax rate is 7.65%. Her employer offers her the choice between $5,000 additional cash salary or a nontaxable fringe benefit. Lori would have to pay $3,200 to purchase the benefit directly. Which of the following statements is true?