Week 2 547

398 Words2 Pages
Week 2 Problems Thao Porter ACC/547 November 4th,2014 Katherine Castillo Demarco and Janine Jackson have been married for 20 years and have four children who qualify as their dependents. Their income from all sources this year (2013) totaled $200,000 and included a gain from the sale of their home, which they purchased a few years ago for $200,000 and sold this year for $250,000. The gain on the sale qualified for the exclusion from the sale of a principal residence. The Jacksons incurred $16,500 of itemized deductions. a. What is the Jackson’s taxable income? 110100 b. What would their taxable income be if their itemized deductions totaled $6,000 instead of $16,500? c. What would their taxable income be if they had $0 itemized deductions and $6,000 of for AGI deductions? d. Assume the original facts except that they also incurred a loss of $5,000 on the sale of some of their investment assets. What effect does the $5,000 loss have on their taxable income? e. Assume the original facts except that the Jacksons owned investments that appreciated by $10,000 during the year. The Jacksons believe the investments will continue to appreciate, so they did not sell the investments during this year. What is the Jackson’s taxable income? Total Income $200,000 $200,000 $200,000 Total Income $200,000 Total Income $50,000 Nontaxable income total (250K-200K home sale) $50,000 Nontaxable income total (250K-200K home sale) $150,000 Gross Income $150,000 Gross Income $0 Total AGI deductions (2,500+1,500) $(3,000.00) Total AGI deductions (2,500+1,500) Adjusted Gross Income $150,000 $147,000 Std Deduction $(12,200.00) From Table, Married filing Jointly $(12,200.00) From

More about Week 2 547

Open Document