Question

In: Accounting

Sylvester files as a single taxpayer during 2017 and claims one personal exemption. He itemizes deductions...

Sylvester files as a single taxpayer during 2017 and claims one personal exemption. He itemizes deductions for regular tax purposes. He paid charitable contributions of $7,800, real estate taxes of $3,200, state income taxes of $5,950, and interest on a home-equity loan of $2,200. Sylvester’s regular taxable income is $108,000.

a. What is Sylvester's AMTI if he used the home-equity proceeds to purchase a car?

b. What is Sylvester's AMTI if he used the home-equity loan proceeds to build a new garage next to his home?

Expert Solution

What is Sylvester's AMTI if he used the home-equity proceeds to purchase a car?
Description. Amount. Explanation

1)Regular taxable income . $108,000

2)Personal exemption . $3,800

3) Real estate taxes. $3,200 . Not deductible for AMT

4) State income taxes. $5,950. Not deductible for AMT

5)Home equity loan interest$2,200 . Not deductible for AMT*

AMTI . $123,150. Sum of (1) through (5) Note: Interest paid on a home equity loan is generally deductible for regular tax purposes regardless of how the proceeds are used. However, interest paid on a home equity loan is only deductible for AMT purposes if the proceeds of the loan are used to acquire or substantially improve the home.

b. What is Sylvester’s AMTI if he used the home-equity loan proceeds to build a new garage next to his home?

Sylvester’s AMTI is $123,150

Description . Amount . Explanation

1)Regular taxable income. $108,000

2) Personal exemption . $3,800

3) Real estate taxes. $3,200 .Not deductible for AMT

4) State income taxes . $5,950 .Not deductible for AMT

AMTI . $120,950 . Sum (1) through (4)

Note: Charitable contributions are deductible for both regular tax and AMT purposes, thus no AMT adjustment is necessary for charitable contributions in either scenario.

ekkarill92 answered 1 year ago

Determine the amount of taxable income for the taxpayer for 2017. i. Meredith files as single...

Determine the amount of taxable income for the taxpayer for 2017. i. Meredith files as single and for 2017 has AGI of 50,000. Her is age 78, is blind and has no dependents. For 2017, she has itemized deductions of $9,920. Determine Meredith’s taxable income for 2017. ii. George, age 21, is a full-time student and is claimed by his parents as a dependent. During 2017, he received $825 interest income from a bank savings account and $3,895...

John files a return as a single taxpayer. In 2019, he had the following items: ∙...

John files a return as a single taxpayer. In 2019, he had the following items: ∙ Salary of $30,000. ∙ Loss of $65,000 on the sale of Section 1244 stock acquired two years ago. ∙ Interest income of $6,000. In 2020, John again files a return as a single taxpayer and had the following items: Salary of $114,000 Loss of $55,000 on the sale of Section 1244 stock acquired three years ago. Capital gain of $22,000 on the sale of...

Louis files as a single taxpayer. In April of this year he received a $1,260 refund...

Louis files as a single taxpayer. In April of this year he received a $1,260 refund of state income taxes that he paid last year. How much of the refund, if any, must Louis include in gross income under the following independent scenarios? Assume the standard deduction last year was $6,350. (Leave no answer blank. Enter zero if applicable.) a. Last year Louis claimed itemized deductions of $6,466. Louis’s itemized deductions included state income taxes paid of $2,140. Refund to...

Jeff, a single taxpayer, operates a bicycle shop. For the calendar year 2017 he reports the...

Jeff, a single taxpayer, operates a bicycle shop. For the calendar year 2017 he reports the following items of income and expense: Gross income from business. . . . . . . . . . . . . . . . . . . . . . . . . . . . .$150,000 Business operating expenses. . . . . . . . . . . . . . . . . . . . . . . ....

Veronica filed as a single taxpayer in 2019. Her AGI was $249,000, and itemized deductions were...

Veronica filed as a single taxpayer in 2019. Her AGI was $249,000, and itemized deductions were $45,600. Her local property taxes were $15,600 and her state income taxes were $20,000. In 2020, Veronica received a $3,000 refund of the state income taxes she paid in 2019. The standard deduction for single filers in 2019 was $12,200. Apply the tax benefit rule to determine the amount of the state income tax refund included in gross income in 2020.

Tax Rates. Lillian, a single taxpayer, had the following income and deductions for the tax year...

Tax Rates. Lillian, a single taxpayer, had the following income and deductions for the tax year 2018: INCOME: Salary $ 90,000 Business Income 24,000 Interest income from taxable bonds 8,000 Tax-exempt bond interest 4,100 TOTAL INCOME 126,100 DEDUCTIONS: Business expenses $ 9,000 Itemized deductions 15,000 TOTAL DEDUCTIONS 24,000 a. Compute Lillian’s taxable income and federal tax liability for 2018 (round to dollars). b. Compute Lillian’s marginal, average, and effective tax rates. c. For tax planning purposes, which of the three...

Ruth, who files as single, reported itemized deductions of $12,300 on her 2018 tax return.

Ruth, who files as single, reported itemized deductions of $12,300 on her 2018 tax return. Her itemized deductions included $400 of state taxes paid. In 2019, she received a $275 refund of state taxes paid in 2018. What is the amount that Ruth needs to report on her 2019 tax return? A) $400. B) $275. C) $300. D) $0.

Carey, a single taxpayer, purchased a rental house in 2019, which he actively manages. During 2019,...

Carey, a single taxpayer, purchased a rental house in 2019, which he actively manages. During 2019, Carey had a loss of $14,000 from the rental house. If Carey's adjusted gross income for 2019 is $138,000 before the rental loss, what is the amount of Carey's allowable deduction for the rental activity for 2019? a.$0 b.$6,000 c.$12,000 d.$3,000 e.None of these choices are correct. a. $0 b. $6,000 c. $12,000 d. None of these choices are correct

Taxpayer, age 19, is a full-time graduate student at State University. During 2017, he received the...

Taxpayer, age 19, is a full-time graduate student at State University. During 2017, he received the following payments: Loan from college financial aid office $ 1,500 Resident adviser housing 2,500 State scholarship for ten months (meals allowance) 6,000 State scholarship (tuition and books) 2,400 Cash award for being the outstanding resident adviser 3,000 Cash support from parents 2,000 $17,400 Taxpayer served as a resident adviser in a dormitory and, therefore, the university waived the $2,500 charge for the room he...

Alexis, a single taxpayer, age 28, files a return for 2019. Information for the year includes...

Alexis, a single taxpayer, age 28, files a return for 2019. Information for the year includes the following: AGI of $100,000 -Paid $1,000 to a Qualified Charitable Organization - local high school, to attend a fund raising dinner. The value of the dinner was $100. -Made a donation to her church of $5,000 -Medical insurance of $11,000 (Alexis was NOT covered by a plan at work). -Dentist bills $4,000 Her itemized deductions are how much: (NOTE: do not include a...