Question

In: Accounting

Compute Aiden’s 2019 taxable income on the basis of the following information. Aiden is married but has not seen or heard from his wife for over three years.

Salary...............................................................................................................$ 80,000

Interest on bonds issued by City of Boston.....................................................3,000

Interest on CD issued by Wells Fargo Bank.....................................................2,000

Cash dividend received on Chevron common stock......................................2,200

Life insurance proceeds paid due to the death of Aunt Margie

(Aiden was the designated beneficiary of the policy).................................200,000

Inheritance received on death of Aunt Margie............................................100,000

Jackson (a cousin) repaid a loan Aiden made to him in 2013

(no interest was provided for)............................................................................5,000

Itemized deductions (state income tax, property taxes on residence, interest on home mortgage, charitable contributions).......................................................9,700

Number of dependents (children, ages 17 and 18; mother-in-law, age 60).........3

Age...............................................................................................................................43

Expert Solution

Salary $ 80,000

Interest on CD 2,000

Dividend 2,200

AGI $ 84,200

Standard deduction (head of household) (18,350)

Taxable income $ 65,850

The interest ($3,000) on the bonds is an exclusion (not taxable). Also excluded from gross income are the life insurance proceeds ($200,000) and the inheritance ($100,000). The loan repayment ($5,000) is a nontaxable return of capital. Aiden chose not to itemize his deductions from AGI ($9,700); the head-of-household standard deduction ($18,350) provides a larger from AGI deduction.

Taxable income = $ 65,850

Renze Joy Candido answered 2 years ago

Compute the taxable income for 2019 for Aiden on the basis of the following information. Aiden...

Compute the taxable income for 2019 for Aiden on the basis of the following information. Aiden is married but has not seen or heard from his wife since 2017. Salary $80,000 Interest on bonds issued by the City of Boston 3,000 Interest on CD issued by Wells Fargo Bank 2,000 Cash dividend received on Chevron common stock 2,200 Life insurance proceeds paid on death of aunt (Aiden was the designated beneficiary of the policy) 200,000 Inheritance received upon death of...

Compute the taxable income for 2017 for Aiden on the basis of the following information. Aiden...

Compute the taxable income for 2017 for Aiden on the basis of the following information. Aiden is married but has not seen or heard from his wife since 2015. Salary $80,000 Interest on bonds issued by City of Boston 3,000 Interest on CD issued by Wells Fargo Bank 2,000 Cash dividend received on Chevron common stock 2,200 Life insurance proceeds paid upon death of aunt (Aiden was the designated beneficiary of the policy) 200,000 Inheritance received upon death of aunt...

Problem 3-30 (LO. 1) Compute Aiden's 2017 taxable income on the basis of the following information....

Problem 3-30 (LO. 1) Compute Aiden's 2017 taxable income on the basis of the following information. Aiden is married but has not seen or heard from his wife for over three years. Salary $80,000 Interest on bonds issued by City of Boston 3,000 Interest on CD issued by Wells Fargo Bank 2,000 Cash dividend received on Chevron common stock 2,200 Life insurance proceeds paid upon death of Aunt Margie (Aiden was the designated beneficiary of the policy) 200,000 Inheritance received...

Compute MV Corp.’s 2019 taxable income given the following information relating to its year 1 activities....

Compute MV Corp.’s 2019 taxable income given the following information relating to its year 1 activities. Also, compute MV’s Schedule M-1 assuming that MV’s federal income tax expense for book purposes is $100,000. Use Exhibit 16-6. Gross profit from inventory sales of $500,000 (no book–tax differences). Dividends MV received from 25 percent-owned corporation of $100,000 (assume this is also MV’s pro rata share of the distributing corporation’s earnings). Expenses other than DRD, charitable contribution (CC), and net operating loss (NOL),...

Compute HC Inc.’s current-year taxable income given the following information relating to its 2019 activities. Also,...

Compute HC Inc.’s current-year taxable income given the following information relating to its 2019 activities. Also, compute HC’s Schedule M-1 assuming that HC’s federal income tax expense for book purposes is $30,000. Use Exhibit 16-6. Gross profit from inventory sales of $310,000 (no book–tax differences). Dividends HC received from 28 percent-owned corporation of $120,000 (this is also HC’s pro rata share of the corporation’s earnings). Expenses other than DRD, charitable contribution (CC), and net operating loss (NOL), are $300,000 (no...

Please Compute Gross Income, Adjusted Gross income, and Taxable income based on the following information below....

Please Compute Gross Income, Adjusted Gross income, and Taxable income based on the following information below. Salary $299,750.00 Interest income $230.00 Municiple Bond interest $450.00 Treasure bond Interest $675.00 Dividends $1,885.00 Short-Term Capital Gain (SBUX STOCK) $0.00 Short-Term Capital Gain (AMZN STOCK) -$4,350.00 Short-Term Capital Gain (UA Stock) $26.45 Long-term Capital Gain (AAPL STOCK) $3,000.00 Daycare cost for child #1 $10,000.00 Dentist fees (unreimbursed by insurance) $10,500.00 Prescription cost(reimbursed by insurance) $1,380.00 Mortgage Interest $13,478.00 Property Taxes Paid $4,144.00 Vehicle...

Kirk Van Houten, who has been married for 21 years, would like to buy his wife...

Kirk Van Houten, who has been married for 21 years, would like to buy his wife an expensive diamond ring with a platinum setting on their 30-year wedding anniversary. Assume that the cost of the ring will be $10,500 in 9 years. Kirk currently has $4,433 to invest. What annual rate of return must Kirk earn on his investment to accumulate enough money to pay for the ring? The annual rate of return Kirk must earn on his investment to...

From the following information calculate taxable income and tax liability of Mr. Zawad for the income...

From the following information calculate taxable income and tax liability of Mr. Zawad for the income year ended 30th June, 2018. Basic pay Tk. 20,000 per month; House rent allowance Tk. 8000 per month; Entertainment allowance Tk. 6000 per quarter; He contributed 10% of basic salary in a recognized provident fund and his employer contributed half the amount in the fund; He contributed Tk. 5000 as the said fund as interest for the year @ 14.5%; Two festival bonuses, One...

Oscar is 73 years old. His 2019 net income for tax purposes from his RRIF and...

Oscar is 73 years old. His 2019 net income for tax purposes from his RRIF and other investments is $120,000. He lives with his common-law partner, Felix who is 63 years old. Felix’s only income for 2019 was investment income of $6,000. Oscar can claim all of the following federal tax credits except: Basic personal tax credit. Age tax credit. Pension tax credit. Spousal tax credit.

Alyssa is a head of household, has $27,000 of taxable income in 2019 from non-capital gain...

Alyssa is a head of household, has $27,000 of taxable income in 2019 from non-capital gain or loss sources, and has the following capital gains and losses. (10 points) 28% long-term capital gain $ 4,300 28% long-term capital loss (2,000) 0%/15%/20% long-term capital gain 19,000 Short-term capital loss (1,700) What is Alyssa’s taxable income? Show and label all calculations. How will this taxable income be taxed? Indicate what portion of the taxable income will be taxed at ordinary rates versus...