Question

59. Martin S. Albert (Social Security number 111-11-1111) is 39 years old and is marriedto Michele R. Albert (Social Security number 123-45-6789). The Alberts live at 512Ferry Road, Newport News, VA 23601. They file a joint return and have two depend-ent children, Charlene, age 17, and Jordan, age 18. Charlene’s Social Security num-ber is 123-45-6788, and Jordan’s Social Security number is 123-45-6787. In 2015,Martin and Michele had the following transactions: a. Martin received $120,000 in salary from Red Steel Corporation, where he is a con-struction engineer. Withholding for Federal income tax was $10,750. The amounts withheld for FICA taxes were as follows: $7,049 ($113,700 x 6.2%) for SocialSecurity and $1,740 ($120,000 x 1.45%) for Medicare. Martin worked in Mexicofrom January 1, 2014, until February 15, 2015. His $120,000 salary for 2015 includes $18,000 he earned for January and one-half of February 2015 while working in Mexico. b. Martin and Michele received $800 in qualified dividends on Green, Inc. stock and $400 interest on Montgomery County (Virginia) school bonds. c. Martin received $2,300 interest from a Bahamian bank account. d. Michele received 50 shares of Applegate Corporation common stock as a stockdividend. The shares had a fair market value of $2,500 at the time Michelereceived them, and she did not have the option of receiving cash. e. Martin and Michele received a $1,200 refund on their 2014 Virginia income taxes.Their itemized deductions in 2014 totaled $14,000. f. Martin paid $6,600 alimony to his former wife, Rose T. Morgan (Social Security number 123-45-6786). g. Martin and Michele kept the receipts for their sales taxes paid of $1,100. h. Martin and Michele’s itemized deductions were as follows: • State income tax paid and withheld totaled $5,100. • Real estate taxes on their principal residence were $3,700. • Mortgage interest on their principal residence was $2,500. • Cash contributions to the church totaled $2,800. Part 1—Tax Computation Compute the Alberts’s net tax payable (or refund due) for 2017.

Answer 1