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Alfred E. Old and Beulah A. Crane, each age 42




Question;Problem 59. Alfred E. Old and Beulah A.;Crane, each age 42, married on September 7, 2011. Alfred and Beulah will file a;joint return for 2013. Alfred?s Social Security number is 111-11- 1111.;Beulah?s Social Security number is 123-45-6789, and she adopted ?Old? as her;mar- ried name. They live at 211 Brickstone Drive, Atlanta, GA 30304. Alfred;was divorced from Sarah Old in March 2011. Under the divorce agreement, Alfred;is to pay Sarah $1,250 per month for the next 10 years or until Sarah?s death;whichever occurs first. Alfred pays Sarah $15,000 in 2013. In addition, in;January 2013, Alfred pays Sarah $50,000, which is designated as being for her;share of the marital property. Also, Alfred is responsible for all prior years?;income taxes. Sarah?s Social Secu- rity number is 123-45-6788. Alfred?s salary;for 2013 is $150,000, and his employer, Cherry, Inc. (Federal I.D. No.;98-7654321), provides him with group term life insurance equal to twice his;annual sal- ary. His employer withheld $24,900 for Federal income taxes and;$8,000 for state income taxes. The proper amounts were withheld for FICA taxes.;Beulah recently graduated from law school and is employed by Legal Aid Society;Inc. (Federal I.D. No. 11-1111111), as a public defender. She receives a salary;of $40,000 in 2013. Her employer withheld $7,500 for Federal income taxes and;$2,400 for state income taxes. The proper amounts were withheld for FICA taxes.;Beulah has $2,500 in qualified dividends on Yellow Corporation stock she;inherited. Alfred and Beulah receive a $1,900 refund on their 2012 state income;taxes. They item- ized deductions on their 2012 Federal income tax return;(total of $15,000). Alfred and Beulah pay $4,500 interest and $1,450 property;taxes on their personal residence in 2013. Their charitable contributions total;$2,400 (all to their church). They paid sales taxes of $1,400, for which they;maintain the receipts. Compute the Olds?s net tax payable (or refund due) for;2013. If you use tax forms for your solution, you will need Form 1040 and Schedules;A and B. Suggested software: H&R BLOCK Tax Software.;Please answer Cumulative Problem 59 in the Instructional;Materials.;You will need Form 1040 and Schedules A and B.;Check answers for Cumulative Problem 59;Form 1040 - Line 37 - Adjusted Gross Income - 179,700;Line 74a - 2,377;Schedule A, Line 29 - Total Itemized Deductions - 18,750


Paper#38448 | Written in 18-Jul-2015

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