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ACC547 Chapter 6: Individual Deductions

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Question;Discussion Questions1.(LO1)It has been suggested that tax policy favors deductions for AGI compared to itemized deductions. Describe two ways in which deductions for AGI are treated more favorably than itemized deductions.2.(LO1)How is a business activity distinguished from an investment activity? Why is this distinction important for the purpose of calculating federal income taxes?3.(LO1)Describe how a business element is reflected in the requirements to deduct moving expenses and how Congress limited this deduction to substantial moves.4.(LO1)Explain why Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for AGI) when employees can only itemize this cost as a medical expense. Would a self-employed taxpayer ever prefer to claim health insurance premiums as an itemized deductions rather than a deduction for AGI? Explain.5.(LO1)Explain why Congress allows self-employed taxpayers to deduct half of their self-employment tax.6.(LO1)Using the Internal Revenue Code, describe two deductions for AGI that are not described in this chapter.7.(LO1)Explain why Congress allows taxpayers to deduct interest forfeited as a penalty on the premature withdrawal from a certificate of deposit.8.(LO1)Describe the mechanical limitation on the deduction of qualified educational expenses and explain how it differs from the limitation on the deduction for interest on qualified educational loans.9.(LO1)Congress has tried to subsidize the cost of higher education through the federal income tax system. Compare and contrast the operation of the deduction for qualified educational costs and the operation of the deduction for interest on qualified educational loans.10.(LO2)Explain why the medical expense and casualty loss provisions are sometimes referred to as ?wherewithal? deductions and how this rationale is reflected in the limits on these deductions.11.(LO2)Describe the type of medical expenditures that qualify for the medical expense deduction. Will the cost of meals consumed while hospitalized qualify for the deduction? Will over-the-counter drugs and medicines qualify for the deduction? Why or why not?12.(LO2)Under what circumstances can a taxpayer deduct medical expenses paid for a member of his family? Does it matter if the family member reports significant amounts of gross income and cannot be claimed as a dependent?13.(LO2)What types of taxes qualify to be deducted as itemized deductions? What sort of taxes don?t qualify for the deduction? Would a vehicle registration fee qualify as a deductible tax? Why or why not?14.(LO2)Compare and contrast the limits on the deduction of interest on home acquisition indebtedness versus home equity loans. Are these limits consistent with horizontal equity? Explain.15.(LO2)Explain the argument that the deductions for charitable contributions, home mortgage interest, and state and local taxes all represent indirect subsidies for these activities.16.(LO2)Cash donations to charity are subject to a number of very specific substantiation requirements. Describe these requirements and how charitable gifts can be substantiated. Describe the substantiation requirements for property donations.17.(LO2)Describe the conditions in which a donation of property to a charity will result in a charitable contribution deduction of fair market value and when it will result in a deduction of the tax basis of the property.18.(LO2)Describe the type of event that qualifies as a casualty for tax purposes.19.(LO2)A casualty loss from the complete destruction of a personal asset is limited to the lesser of fair market value or the property?s adjusted basis. Explain the rationale for this rule as opposed to just allowing a deduction for the basis of the asset.20.(LO2)This week Jim?s residence was heavily damaged by a storm system that spread destruction throughout the region. While Jim?s property insurance covers some of the damage, there is a significant amount of uninsured loss. The governor of Jim?s state has requested that the president declare the region a federal disaster area and provide federal disaster assistance. Explain to Jim the income tax implications of such a declaration and any associated tax planning possibilities.21.(LO2)Describe the types of expenses that constitute miscellaneous itemized deductions and explain why these expenses rarely produce any tax benefits.22.(LO2)Explain why the cost of commuting from home to work is not deductible as a business expense.23.(LO2)When is the cost of education deductible as an employee business expense?24.(LO2)How might the reimbursement of a portion of an employee expense influence the deductibility of the expense for the employee?25.(LO2)Explain why an employee should be concerned about whether his employer reimburses business expenses using an ?accountable? plan?26.(LO2)Jake is a retired jockey who takes monthly trips to Las Vegas to gamble on horse races. Jake also trains race horses part time at his Louisville ranch. So far this year, Jake has won almost $47,500 during his trips to Las Vegas while spending $27,250 on travel expenses and incurring $62,400 of gambling losses. Jake also received $60,000 in revenue from his training activities and he incurred $72,000 of associated costs. Explain how Jake?s gambling winnings and related costs will be treated for tax purposes. Describe the factors that will influence how Jake?s ranch expenses are treated for tax purposes.27.(LO2)Frank paid $3,700 in fees for an accountant to tabulate business information (Frank operates as a self-employed contractor and files a Schedule C). The accountant also spent time tabulating Frank?s income from his investments and determining Frank?s personal itemized deductions. Explain to Frank whether or not he can deduct the $3,700 as a business expense or as an itemized deduction, and provide a citation to an authority that supports your conclusion.28.(LO2)Contrast ceiling and floor limitations, and give an example of each.29.(LO2)Identify which itemized deductions are subject to floor limitations, ceiling limitations, phase-out limitations, or some combination of these limits.30.(LO3)Describe the tax benefits from ?bunching? itemized deductions in one year. Describe the characteristics of the taxpayers who are most likely to benefit from using bunching and explain why this is so.31.(LO3)Explain how the standard deduction is rationalized and why the standard deduction might be viewed as a floor limit on itemized deductions.32.(LO3)Explain why the overall phase-out of itemized deductions has been described as both a ?stealth? tax and a ?haircut? of itemized deductions. Explain whether it is possible for a taxpayer to lose all itemized deductions under the phase-out rules.33.(LO3)Describe the mechanism for phasing out exemptions. Can a taxpayer lose the benefit of all of her personal and dependency exemptions?34.(LO3)Determine if a taxpayer can change his election to itemize deductions once a return is filed. (Hint:Read about itemization under Reg. ?1.63-1.)35.(LO3)Determine whether a taxpayer who is claimed as a dependent on another return is entitled to an addition to the standard deduction for age or blindness. (Hint:Read the calculation of the standard deduction under IRC ?63.)Problems36.(LO1)Clem is married and is a skilled carpenter. Clem?s wife, Wanda, works part-time as a substitute grade school teacher. Determine the amount of Clem?s expenses that are deductiblefor AGIthis year (if any) under the following circumstances:Clem is self-employed and this year he incurred $525 for tools and supplies related to his job. Since neither were covered by a qualified health plan, Wanda paid health insurance premiums of $3,600 to provide coverage for herself and Clem.Clem and Wanda own a garage downtown that they rent to a local business for storage. This year they incurred $1,250 in utilities and depreciation of $780.Clem paid self-employment tax of $14,200 and Wanda had $3,000 of Social Security taxes withheld from her pay.Clem paid $45 to rent a safe deposit box to store his coin collection. Clem has collected coins intermittently since he was a boy, and he expects to sell his collection when he retires.37.(LO1)Clyde currently commutes 55 miles to work in the city. He is considering a new assignment in the suburbs on the other side of the city that would increase his commute considerably. He would like to accept the assignment, but he thinks it might require that he move to the other side of the city. Determine if Clyde?s move qualifies for a moving expense deduction and calculate the amount (if any) under the following circumstances:Clyde estimates that unless he moves across town, his new commute would be almost 70 miles. He also estimates the costs of a move as follows:Lodging while searching for an apartment$ 125Transportation?auto75Mover?s fee (furniture and possessions)1,500Lodging while en route210Meals while en route35Same as (a) above, except Clyde estimates that unless he moves across town, his new commute would be almost 115 miles.Same as (a) above, except Clyde?s new commute would be almost 150 miles and the movers intend to impose a $450 surcharge on the moving fee for the additional distance.38.(LO1)Smithers is a self-employed individual who earns $30,000 per year in self-employment income. Smithers pays $2,200 in annual health insurance premiums for his own medical care. In each of the following situations, determine the amount of the deductible health insurance premium for Smithers.Smithers is single and the self-employment income is his only source of income.Smithers is single, but besides being self-employed, Smithers is also employed part-time by SF Power Corporation. This year Smithers elected not to participate in SF?s health plan.Smithers is self-employed and he is also married. Smithers?s spouse, Samantha, is employed full-time by SF Power Corporation and is covered by SF?s health plan. Smithers is not eligible to participate in SF?s health plan.Smithers is self-employed and he is also married. Smithers? spouse, Samantha, is employed full-time by SF Power Corporation and is covered by SF?s health plan. Smithers elected not to participate in SF?s health plan.39.(LO1)Hardaway earned $100,000 of compensation this year. He also paid (or had paid for him) $3,000 of health insurance. What is Hardaway?s AGI in each of the following situations (ignore the effects of Social Security and self-employment taxes)?Hardaway is an employee and his employer paid Hardaway?s $3,000 of health insurance for him as a nontaxable fringe benefit. Consequently, Hardaway received $97,000 of taxable compensation and $3,000 of nontaxable compensation.Hardaway is a self-employed taxpayer, and he paid $3,000 of health insurance himself. He is not eligible to participate in an employer-sponsored plan.40.(LO1)Betty operates a beauty salon as a sole proprietorship. Betty also owns other property including a half interest in a partnership that operates a delivery service, a half interest in a partnership that operates a movie theatre, and an apartment building. This year Betty paid or reported the following expenses related to her salon and other property. Determine Betty?s AGI.Interest income$11,255Salon sales and revenue86,360Salaries paid to beauticians45,250Beauty salon supplies23,400Revenues from delivery service partnership18,200Expenses from delivery service partnership5,200Operating income for theatre partnership17,250Rental revenue from apartment building31,220Depreciation on apartment building12,900Real estate taxes paid on apartment building11,100Real estate taxes paid on personal residence6,241Contributions to charity4,23741.(LO1)Lionel is an unmarried law student at State University Law School, a qualified educational institution. This year Lionel borrowed $24,000 from Counti Bank and paid interest of $1,440. Lionel used the loan proceeds to pay his law school tuition. Calculate the amounts Lionel can deduct for higher education expenses and interest on higher education loans under the following circumstances:Lionel?s AGI before deducting either the deduction for higher education expenses or interest on higher education loans is $50,000.Lionel?s AGI before deducting either the deduction for higher education expenses or interest on higher education loans is $69,000.Lionel?s AGI before deducting either the deduction for higher education expenses or interest on higher education loans is $90,000.Lionel?s AGI is $50,000 before deducting either the deduction for higher education expenses or interest on higher education loans. Lionel used $16,000 of the loan to pay law school tuition and $8,000 of the loan to purchase a car.42.(LO1)Ned is a head of household with a dependent son, Todd, who is a full-time student. Todd is studying auto mechanics at Mechanics Tech, a qualified educational institution. This year Ned made the following expenditures related to Todd?s education:Tuition (required for enrollment)$1,700Room and board2,200Books (required for enrollment)700Travel (to and from school)350Ned reports that his AGI is $45,000. What is the maximum amount of Ned?s deduction for qualified educational expenses?Ned reports that his AGI is $115,000. What is the maximum amount of Ned?s deduction for qualified educational expenses?43.(LO1)This fall Jacob decided to return to school and entered State University during the fall semester. In September, he paid tuition of $2,800. The same amount of tuition for spring term is due by January 15 of next year. However, Jacob is considering whether tax considerations dictate that he should pay his spring tuition before December 31. Advise Jacob whether he should pay his tuition in December of this year or in January of next year for each of the following independent circumstances:Jacob expects to file single with a modified AGI of $55,000 this year and he expects to have about the same AGI next year.Jacob expects to file single with a modified AGI of $67,700 this year and he expects to have about the same AGI next year.Jacob expects to file single with a modified AGI of $83,000 this year and he expects to have about the same AGI next year.44.(LO1)This year Jack intends to file a married-joint return with two dependents. Jack received $157,500 of salary. and paid $5,000 of qualified tuition costs for his dependent daughter, Deb. This year Jack has also paid qualified moving expenses of $4,300 and $24,000 of alimony.What is Jack?s adjusted gross income? Assume that Jack will opt to treat tax items in a manner to minimize his AGI.Suppose that Jack also reported income of $8,800 from a half share of profits from a partnership and paid $3,000 of interest expense on a loan made to pay qualified educational expenses. What AGI would Jack report under these circumstances? Again, assume that Jack will opt to treat tax items in a manner to minimize his AGI.45.(LO1, LO2)In each of the following independent cases, indicate whether the amount involved is (1) deductibleforAGI, (2) deductiblefromAGI, or (3) not deductible at all.Ted paid $8 rent on a safety deposit box at the bank. In this box he kept the few shares of stock that he owned.Tyler paid $85 for minor repairs to the fence at a rental house he owned.Timmy paid $545 for health insurance premiums this year. Timmy is employed full-time and his employer paid the remaining premiums as a qualified fringe benefit.Tess paid $850 for self-employment taxes and $1,150 of state income taxes on her consulting income.46.(LO1, LO2)In each of the following independent cases, indicate whether the amount involved is (1) deductibleforAGI, (2) deductiblefromAGI, or (3) not deductible at all.Fran spent $90 for uniforms for use on her job. Her employer reimbursed her for $75 of this amount under an accountable plan.Timothy, a plumber employed by ACE Plumbing, spent $65 for small tools to be used on his job, but he was not reimbursed by ACE.Jake is a perfume salesperson. Because of his high pay, he receives no allowance or reimbursement from his employer for advertising expenses even though his position requires him to advertise frequently. During the year, he spent $2,200 on legitimate business advertisements.Trey is a self-employed special-duty nurse. He spent $120 for uniforms.Mary, a public school teacher, spent $340 for magazine subscriptions. The magazines were used in her classroom activities.Wayne lost $325 on the bets he made at the race track, but he won $57 playing online poker.47.(LO2)Ted is a successful attorney, but when he turned 50 years old he decided to retire from his law practice and become a professional golfer. Ted has been a very successful amateur golfer, so beginning this year Ted began competing in professional golf tournaments. At year-end, Ted reported the following expenses associated with competing in 15 professional events:Transportation from his home to various tournaments$25,000Lodging for the 15 weeks on the road18,200Meals while traveling and during golf tournaments5,200Entry fees7,500Lessons from various golf teachers12,500Golf supplies (balls, tees, etc.)783Total expenses$69,183Suppose that Ted reports $275,000 in gross income from his pension and various investments. Describe the various considerations that will dictate the extent to which Ted can deduct the expenses associated with professional golf.Calculate the maximum amount of his golf expenses that Ted could deduct if the IRS and the courts are convinced that Ted engages in competitive golf primarily for enjoyment rather than the expectation of making a profit. Assume Ted?s AGI is $275,000.48.(LO2)Simpson is a single individual who is employed full-time by Duff Corporation. This year Simpson reports AGI of $50,000 and has incurred the following medical expenses:Dentist charges$ 900Physician?s charges1,800Optical charges500Cost of eyeglasses300Hospital charges2,100Prescription drugs250Over-the-counter drugs450Medical insurance premiums775Calculate the amount of medical expenses that will be included with Simpson?s itemized deductions.Suppose that Simpson was reimbursed for $650 of the physician?s charges and $1,200 for the hospital costs. Calculate the amount of medical expenses that will be included with Simpson?s itemized deductions.49.(LO2)This year Tim is age 45 and is considering enrolling in an insurance program that provides for long-term care insurance. He is curious about whether the insurance premiums are deductible as a medical expense and, if so, what is the maximum amount that can be deducted in any year.50.(LO2)Doctor Bones prescribed physical therapy in a pool to treat Jack?s broken back. In response to this advice (and for no other reason), Jack built a swimming pool in his backyard and strictly limited use of the pool to physical therapy. Jack paid $25,000 to build the pool, but he wondered if this amount could be deducted as a medical expenses? Determine if a capital expenditure such as the cost of a swimming pool qualifies for the medical expense deduction.51.(LO1, LO2)Charles has AGI of $50,000 and has made the following payments related to (1) land he inherited from his deceased aunt and (2) a personal vacation taken last year. Calculate the amount of taxes Charles may include in his itemized deductions for the year under the following circumstances:State inheritance tax on the land$1,200County real estate tax on the land1,500School district tax on the land690City special assessment on the land (replacing curbs and gutters)700State tax on airline tickets (paid on vacation)125Local hotel tax (paid during vacation)195Suppose that Charles holds the land for appreciation.Suppose that Charles holds the land for rent.Suppose that the vacation was actually a business trip.52.(LO2)Dan has AGI of $50,000 and paid the following taxes during this tax year. Calculate the amount of taxes Dan may include in his itemized deductions for the year.State income tax withholding$1,400State income tax estimated payments750Federal income tax withholding3,000Social security tax withheld from wages2,100State excise tax on liquor400Automobile license (based on the car?s weight)300State sales tax paid47553.(LO1, LO2)Tim is a single, cash-basis taxpayer with one personal exemption. In April of this year Tim paid $1,020 with his state income tax return for the previous year. During the year, Tim had $5,400 of state income tax and $18,250 of federal income tax withheld from his salary. In addition, Tim made estimated payments of $1,360 and $1,900 of state and federal income taxes, respectively. Finally, Tim expects to receive a refund of $500 for state income taxes when he files his state tax return for this year in April next year. What is the amount of taxes that Tim can deduct as an itemized deduction?54.(LO2)This year Randy paid $28,000 of interest (Randy borrowed $450,000 to buy his residence and it is currently worth $500,000). Randy also paid $2,500 of interest on his car loan and $4,200 of margin interest to his stockbroker. How much of this interest can Randy deduct as an itemized deduction under the following circumstances?Randy received $2,200 of interest this year and no other investment income or expenses.Randy had no investment income this year.55.(LO2)Calvin reviewed his cancelled checks and receipts this year for charitable contributions. Calculate Calvin?s charitable contribution deduction and carryover (if any) under the following circumstances:DoneeItemCostFMVHobbs Medical CenterIBM stock$5,000$22,000State Museumpainting5,0003,000A needy familyfood and clothes400250United Waycash8,0008,000Calvin?s AGI is $100,000.Calvin?s AGI is $100,000 but the State Museum told Calvin that it plans to sell the painting.Calvin?s AGI is $50,000.Calvin?s AGI is $100,000 and Hobbs is a nonoperating private foundation.Calvin?s AGI is $100,000 but the painting is worth $10,000.56.(LO2)In addition to cash contributions to charity, Dean decided to donate shares of stock and a portrait painted during the earlier part of the last century. Dean purchased the stock and portrait many years ago as investments. Dean reported the following recipients:CharityPropertyCostFMVState Universitycash$15,000$15,000Red Crosscash14,50014,500State History Museumpainting5,000$82,000City Medical CenterDell stock28,00017,000Determine the maximum amount of charitable deduction for each of these contributionsignoringthe AGI ceiling on charitable contributions.Assume that Dean?s AGI this year is $150,000. Determine Dean?s itemized deduction for his charitable contributions this year and any carryover.Assume that Dean?s AGI this year is $240,000. Determine Dean?s itemized deduction for his charitable contributions this year and any carryover.Suppose Dean is a dealer in antique paintings and he held the paintings for sale before the contribution. Determine Dean?s itemized deduction for his charitable contributions this year and any carryover.Suppose that Dean?s objective with the donation to the museum was to finance expansion of the historical collection. Hence, Dean was not surprised when the museum announced the sale of the portrait because of its limited historical value. What is Dean?s charitable contribution for the paintings in this situation (ignoring AGI limitations)?57.(LO2)Tim suffered greatly this year. In January a freak storm damaged his sailboat and in July Tim?s motorcycle was stolen from his vacation home. Tim originally paid $27,000 for the boat, but he was able to repair the damage for $6,200. Tim paid $15,500 for the motorcycle, but it was worth $17,000 before it was stolen. Insurance reimbursed $1,000 for the boat repairs and the cycle was uninsured.Calculate Tim?s deductible casualty loss if his AGI is $50,000.Calculate Tim?s deductible casualty loss if his AGI is $150,000.How would you answer (a) if Tim received an additional $65,000 in interest from municipal bonds this year?58.(LO2)Trevor is a single individual who is a cash-method calendar-year taxpayer. For each of the next two years (year 1 and year 2), Trevor expects to report AGI of $80,000, contribute $3,000 to charity, and pay $2,200 in state income taxes.Estimate Trevor?s taxable income for year 1 and year 2 using the current amounts for the standard deduction and personal exemption for both years.Now assume that Trevor combines his anticipated charitable contributions for the next two years and makes the combined contribution in December of year 1. Estimate Trevor?s taxable income for each of the next two years using the current amounts for the standard deduction and personal exemption. Reconcile the total taxable income to your solution to (a) above.Trevor plans to purchase a residence next year, and he estimates that additional property taxes and residential interest will each cost $4,000 annually ($8,000 in total). Estimate Trevor?s taxable income for each of the next two years (year 1 and year 2) using the current amounts for the standard deduction and personal exemption.Assume that Trevor makes the charitable contribution for year 2 and pays the real estate taxes for year 2 in December of year 1. Estimate Trevor?s taxable income for year 1 and year 2 using the current amounts for the standard deduction and personal exemption. Reconcile the total taxable income to your solution to (c) above.Explain the conditions in which the bunching strategy in part (d) will generate tax savings for Trevor.59.(LO2)Baker paid $775 for the preparation of his tax return and incurred $375 of employee business expenses, of which $60 was reimbursed by his employer through an accountable plan. Baker also paid a $100 fee for investment advice. Calculate the amount of these expenses that Baker is able to deduct assuming he itemizes his deductions in each of the following situations:Baker?s AGI is $50,000.Baker?s AGI is $100,000.60.(LO2)Zack is employed as a full-time airport security guard. This year Zack?s employer transferred him from Dallas to Houston. At year-end, Zack discovered a number of unreimbursed expenses related to his employment in Dallas prior to his move to Houston. Identify which expenses are deductible and whether the deductions arefororfromAGI.Cost of bus transportation from his home to the airport$ 150Subscription toJournal of Security Guards52Lunch with colleagues195Cost of self-defense course at local college500Lunch with supervisor during evaluations383Total$1,28061.(LO3)This year Jeff, who is single, is entitled to the following deductions before phase-outs:State income taxes$7,850Real estate taxes1,900Home mortgage interest8,200Charitable contributions1,700Assuming Jeff?s AGI is $196,800, calculate Jeff?s itemized deductions after considering the overall phase-out of itemized deductions.Suppose that Jeff?s AGI is $1,996,800. Calculate Jeff?s itemized deductions after considering the overall phase-out of itemized deductions.62.(LO3)Jim who is single is considering expending $30,000 that will be deductible. He is eligible to claim the standard deduction and one personal exemption. Assuming Jim has no other deductions and his taxable income is subject to a tax rate of 25 percent, calculate the amount of tax savings Jim will gain from the deduction under the following independent conditions:Jim has AGI of $150,000 (without the deduction) and the deduction isfor AGI.Jim has AGI of $150,000 and the deduction isfrom AGI. Assume that the deduction is a charitable contribution and Jim has no other itemized deductions.Jim has AGI of $250,000 (without the deduction) and the deduction isfor AGI.63.(LO1, LO2, LO3)Tammy teaches elementary school history for the Metro School District. This year she has incurred the following expenses associated with her job:Noncredit correspondence course on history$ 900Teaching publications1,800Tuition for university graduate course in physics1,200Transportation between school and home750Photocopying class materials100Transportation from school to extracurricular activities110Cost of lunches eaten during study halls540Tammy?s base salary is $45,000 and she receives a $200 salary supplement to help her cover expenses associated with her school extracurricular activities.Identify the amount and type (forAGI orfromAGI) of deductible expenses.Calculate Tammy?s AGI and taxable income for this year assuming she files single with one personal exemption.Comprehensive Problems64.Evan graduated from college, and took a job as a deliveryman in the city. Evan was paid a salary of $63,500 and he received $700 in hourly pay for part-time work over the weekends. Evan summarized his expenses below.Cost of moving his possessions to the city$1,200Interest paid on accumulated student loans2,800Cost of purchasing a delivery uniform1,100Contribution to State University deliveryman program1,300Calculate Evan?s AGI and taxable income if he files single with one personal exemption.65.Read the following letter and help Shady Slim with his tax situation.December 31, 2009To the friendly student tax preparer:Hi, it?s Shady Slim again. I?m told that you need some more information from me in order to complete my tax return. I?m an open book! I?ll tell you whatever I think you need to know. Please assume that gross income is $172,900 for purposes of this problem.Let me tell you a few more things about my life. As you may recall, I am divorced from my wife, Alice. I know that it?s unusual, but I have custody of my son, Shady, Jr. The judge owed me a few favors and I really love the kid. He lives with me full-time and my wife gets him every other weekend. I pay the vast majority of my son?s expenses. I think Alice should have to pay some child support, but she doesn?t have to pay a dime. The judge didn?t owe me that much, I guess.I had to move this year after getting my job at Roca Cola. We moved on February 3 of this year, and I worked my job at Roca Cola for the rest of the year. I still live in the same state, but I moved 500 miles away from my old house. I left a little bit early to go on a house-hunting trip that cost me a total of $450. I hired a moving company to move our stuff at a cost of $2,300. Junior and I got a hotel room along the way that cost us $40 (I love Super 8!). We spent $35 on meals on the way to our new home. Oh yeah, I took Junior to a movie on the way and that cost $20.Can you believe I?m still paying off mystudent loans, even after 15 years! I paid a total of $900 in interest on my old student loans this year.Remember when I told you about that guy that hit me with his car? I had a bunch of medical expenses that were not reimbursed to me by the lawsuit or by my insurance. I incurred a total of $20,000 in medical expenses, and I was only reimbursed for $11,000. Good thing I can write off medical expenses, right?I contributed a lot of money to charity this year. I?m such a nice guy! I gave $1,000 in cash to the March of Dimes. I contributed some of my old furniture to the church. It was some good stuff! I gave a red velvet couch and my old recliner. The furniture is considered vintage and is worth $5,000 today (the appraiser surprised me!), even though I only paid $1,000 for it back in the day. I?m told that the pastor didn?t appreciate the fabric, though, and he?s selling the furniture to pay for some more pews in the church. Some people just have no taste, right? Roca Cola had a charity drive this year and I contributed $90. Turns out, I don?t even miss it, because Roca Cola takes it right off my paycheck every month... $15 a month starting in July. Oh, one other bit of charity from me this year. An old buddy of mine was down on his luck. He lost his job and his house. I gave him $500 to help him out.I paid a lot of money in interest this year. I paid a total of $950 in personal credit card interest. I also paid $13,000 in interest on my home mortgage. I also paid $2,000 in real estate taxes for my new house.A few other things I want to tell you about last year. Someone broke into my house and stole my kid?s brand new bicycle and my set of golf clubs. The total loss from theft was $900. I paid $100 in union dues this year. I had to pay $1,000 for new suits for my job. Roca Cola requires its managers to wear suits every day on the job. I spent a total of $1,300 to pay for gas to commute to my job this year.Oh, this is pretty cool. I?ve always wanted to be a firefighter. I spent $1,000 in tuition to go to the local firefighter?s school. I did this because someone told me that I can deduct the tuition as an itemized deduction, so the money would be coming back to me.That should be all the information you need right now. Please calculate my taxable income. You?re still doing this for free, right?66.Jeremy and Alyssa Johnson have been married for five y

 

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