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?

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 $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/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?