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Tax Computation Related Two problems




3-46) Pension Income. Beth retires when she turns 65. She begins receiving a monthly pension of $300 from her employer?s qualified retirement plan. While employed, Beth contributed $13,000 to the plan.;a. Beth uses the simplified method to compute her exclusion. Why?;b. Compute her monthly exclusion.;c. How much gross income does she report in the first year if she receives 12 monthly checks?;3-62) Jim and Linda are your tax clients. They were divorced two years ago, and the divorce decree stated that Jim was to make monthly payments to Linda. The court designated $300 per month as alimony and $200 per month as child support, or a total of $6,000 per year. Jim has been unemployed for much of the year and paid Linda $2,000 that he said was for child support. In addition, Jim transferred the title to a three-year-old automobile claim she has against him for the unpaid child support and alimony. Does Linda have to report any alimony and is Jim entitled to an alimony deduction? Draft a memo for the file that discusses the tax consequences for both Jim and Linda.


Paper#81119 | Written in 18-Jul-2015

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