Question

In: Accounting

To my friendly student tax preparer: Hello, my name is Shady Slim. I understand you are...

To my friendly student tax preparer:

Hello, my name is Shady Slim. I understand you are going to help me figure out my gross income for the year…whatever that means. It’s been a busy year and I’m a busy man, so let me give you the lowdown on my life and you can do your thing.

I was unemployed at the beginning of the year and got $3,500 in unemployment compensation. I later got a job as a manager for Roca Cola. I earned $55,000 in base salary this year. My boss gave me a $5,500 Christmas bonus check on December 22. I decided to hold on to that check and not cash it until next year, so I won’t have to pay taxes on it this year. Pretty smart, huh? My job’s pretty cool. I get a lot of fringe benefits like a membership to the gym that costs $500 a year and all the Roca Cola I can drink, although I can’t really drink a whole lot. I also got an award for having the department with the least number of accidents. My boss gave me a gold watch worth $250!

As part of my manager duties, I get to decide on certain things like contracts for the company. My good buddy, Eddie, runs a bottling company. I made sure that he won the bottling contract for Roca Cola for this year (even though his contract wasn’t quite the best). Eddie bought me a Corvette this year for being such a good friend and helping him out. The Corvette cost $60,000 and he bought it for me out of the goodness of his own heart. What a great guy!

Here’s a bit of good luck for the year. Upon leaving my office one day, I found $11,000 lying in the street! Well, one person’s bad luck is my good luck, right? So awesome, I love free money! And my friend told me I don’t even have to pay taxes on it!

I like to gamble a lot. I won a $10,000 poker tournament in Las Vegas this year. I also won about $7,000 over the year playing the guys at our Friday night poker game. Can you believe that I didn’t lose anything this year?

Speaking of the guys, one of them hit me with his car as we were leaving the game one night. He must have been pretty ticked that he lost! I broke my right leg and my left arm. I sued the guy and got $12,000 for my medical expenses, $3,000 to pay my psychotherapist for the emotional problems I had relating to the injuries (I got really depressed!), and I won $9,000 in punitive damages. That’ll teach him that he’s not so tough without his car!

Another bit of bad luck. My uncle Monty died this year. I really liked the guy, but the $200,000 inheritance I received from him made me feel a little better about the loss. I did the smart thing with the money and invested it in stocks and tax exempt municipal bonds and socked a little into my savings account. As a result, I received $800 in qualified dividends from the stock, $550 in interest from the municipal bonds, and $200 in interest from my savings account.

My ex-wife, Alice, is still paying me alimony. She’s a lawyer who divorced me a few years ago because I was “unethical” or something like that. Since she was making so much money and I was unemployed at the time, the judge ruled that she had to pay ME alimony. Isn’t that something? She sent me $3,000 in alimony payments this year. She still kind of likes me, though. She sent me a check for $1,000 as a Christmas gift this year. I didn’t get her anything, though.

So there you go. That’s the year in a nutshell. Can you figure out my gross income and complete the Form 1040 for me? And since you’re a student, this is free, right? Thanks, I owe you one! Let me know if I can get you a six-pack of Roca Cola or something.

Complete page 1 and 2 of Slim’s 2017 Form 1040, using 2017 figures, assuming he is unmarried and has no dependents. Determine, from the information given to you, which items are reportable and/or taxable income and where each item should be reported on the tax return, if at all. For any line on the tax return where a reported number is the sum of two or more numbers, create a workpaper, labelled and organized, that shows how you arrived at the number which is on the tax return. Complete the return through line 63, using the correct method for calculating his tax. On a separate sheet of paper, list the changes that would occur in this return if it were completed under 2018 rules. You do NOT have to complete another return; simply list the changes and recalculate the tax due under the new rules.

Expert Solution

Screenshot 2 :

Explanation :

=> Sources i referred to while answering :https://turbotax.intuit.com/tax-tips/general/what-to-know-about-taxes-on-found-property/L9BfdKz7N

Hence, the note found lying in street is also taxable.

=> The gift given by Eddie is way too expensive . Gifts above $14000 are taxable !

ekkarill92 answered 1 year ago

Hello my name is Pete. I posted my previous question in error by forgetting to mention...

Hello my name is Pete. I posted my previous question in error by forgetting to mention that I am located in New York State and am required to go by those rules and regulations. Erica Swanson (SSN 376-38-4930), age 46, is a single parent with three children: Her biological son, Sean Swanson (age 19) is a part-time college student who works fulltime as a landscaper Her biological daughter, Brooklyn Swanson (age 14) Her adopted daughter, Sydney Swanson (age 12) Although...

My name is Donna. I am a college student studying to be an English teacher. I...

My name is Donna. I am a college student studying to be an English teacher. I dislike inflation, my degree is costing me more than i had anticipated. Good thing that I am a senior, tuition when I started three years ago was 20% less. Maybe I should get my masters but that would put me unto more debt. Why do we have so much inflation? I work part time as a server and have a low fixed rate loan...

Hello, I am struggling to understand some of my accounting homework. Question 01 ) Tulsa Company...

Hello, I am struggling to understand some of my accounting homework. Question 01 ) Tulsa Company is considering investing in new bottling equipment and has two options: Option A has a lower initial cost but would require a significant expenditure to rebuild the machine after four years; Option B has higher maintenance costs, but also has a higher salvage value at the end of its useful life. Tulsa’s cost of capital is 11 percent. The following estimates of the cash...

hello my dear student in less than on a paragraph discuss of the stock market and...

hello my dear student in less than on a paragraph discuss of the stock market and individual stocks are more volatile today than in the past

I understand you want to hear my story; well I’m not much for talking, but I...

I understand you want to hear my story; well I’m not much for talking, but I can give you the highlights. There’s a lot that’s happened over my 80 years. From the top. My name is Sherman Yoder, but I answer to “Red.” No one around here even remembers my real name. I was born in this house in the downstairs bedroom. Mom had already delivered six kids and there was no way I was waiting for Dad to finish...

Python I want to name my hero and my alien in my code how do I...

Python I want to name my hero and my alien in my code how do I do that: Keep in mind I don't want to change my code except to give the hero and alien a name import random class Hero: def __init__(self,ammo,health): self.ammo=ammo self.health=health def blast(self): print("The Hero blasts an Alien!") if self.ammo>0: self.ammo-=1 return True else: print("Oh no! Hero is out of ammo.") return False def...

Hello, I am having difficulty with this assignment. I chose Amazon as my stock, but I...

Hello, I am having difficulty with this assignment. I chose Amazon as my stock, but I am confused on what they're asking : Choose a stock that interests you. Utilizing Bloomberg (or other financial websites) as a source of data, collect the following information: a. The stock’s Beta b. The rate of return on the market (S&P 500 Index) c. The risk-free rate (rRF) d. The last dividend paid (D0)...

Hello sir can you plz change my below code like change names , function name and...

Hello sir can you plz change my below code like change names , function name and add comments so it wont look same but run same. change as much as you can thank you. #include<stdio.h> #include<stdlib.h> #include<stdbool.h> #include<string.h> #include<time.h> struct patient { int id; int age; bool annualClaim; int plan; char name[30]; char contactNum[15]; char address[50]; }; #define MAX_LENGTH 500 struct patient patients[100]; int patientCount = 0; struct claim { int id; int claimedYear; int amountClaimed; int remaininigAmount; }; struct...

Assume you are a CPA who works as a tax preparer at a medium-sized regional accounting...

Assume you are a CPA who works as a tax preparer at a medium-sized regional accounting firm, Morris & Co. CPAs. In the process of preparing the 2018 tax return for your client, Jamie Olds, you discover that you inadvertently made a transposition error in reporting her 2017 business consulting gross income, which reports as a sole proprietorship for tax purposes. You reported Schedule C gross receipts a $45,000 (should have been $54,000). You properly reported her Schedule C expenses...

Hello, I need to do a research and I choose my research question: Do the commercialization...

Hello, I need to do a research and I choose my research question: Do the commercialization and use of civilian drones respect our individual freedoms and privacy? Can you help me with ideas of Research Methodology including: 1. Restatement of research tasks: hypothesis or research questions; 2. Study population and sampling: description of study areas (where? why?), populations and the procedures for the sample selection; 3. Data collection: description of the tools (i.e. the survey instrument) and methods used (i.e....