Last year, Rudolph refinanced his home. Prior to refinancing…

Last year, Rudolph refinanced his home. Prior to refinancing, his only outstanding debt was the balance due on his original mortgage of $100,000. Rudolph needed some additional money take advantage of an investment opportunity, so upon refinancing, Rudolph took out a 30-year mortgage for $250,000.  As an added benefit to the refi, Rudolph will be able deduct the mortgage interest on the entire $250,000.

Katie is 17 years old. She earned $3,600 as a barista at her…

Katie is 17 years old. She earned $3,600 as a barista at her favorite coffee shop. She also earned $4,500 in interest income this year, meaning 2024.  Katie is claimed as a qualifying dependent by her parents.  How much of Katie’s income will be taxed as ordinary income at Katie’s tax rates? 

During the current year, Ken sold several securities that re…

During the current year, Ken sold several securities that resulted in the following gains and losses: Long-term capital gain – $7,250 Short-term capital gain – $2,500 Long-term capital loss – $2,200 Sale of a PTP interest for a Short-term capital loss – $11,200.  What is the net capital gain or loss on Ken’s security sales?

Two years ago Maxine purchased a equipment (five-year proper…

Two years ago Maxine purchased a equipment (five-year property) for use in her manufacturing business at a cost of $12,000. Cost recovery deductions totaled $7,000. The computer was sold for $8,000. What is the amount of the gain, if any, that must be recaptured as ordinary income?

Last year, Rudolph refinanced his home. Prior to refinancing…

Last year, Rudolph refinanced his home. Prior to refinancing, his only outstanding debt was the balance due on his original mortgage of $100,000. Rudolph needed some additional money take advantage of an investment opportunity, so upon refinancing, Rudolph took out a 30-year mortgage for $250,000.  As an added benefit to the refi, Rudolph will be able deduct the mortgage interest on the entire $250,000.