At the beginning of 2018, Donna Harp was employed as a cinematographer by Farah Movie, Inc., a
Question:
At the beginning of 2018, Donna Harp was employed as a cinematographer by Farah Movie, Inc., a motion picture company in Los Angeles, California. In June, she accepted a new job with Ocala Production in Orlando, Florida. Donna is single and her Social Security number is 000.004111. She sold her house in California on August 10 for $500,000. She paid a $14,000 sales commission. The house was acquired on March 23, 1991, for $140,000.
The cost of transporting her household goods and personal effects from California to Orlando amounted to $2,350. To travel from California to Florida, she paid travel and lodging costs of $370 and $100 for meals.
On July 15, she purchased a house for $270,000 on 1225 Minnie Lane in Orlando. To purchase the house, she incurred a 20-year mortgage for $170,000. To obtain the loan, she paid points of $3,400. The $3,600 of property taxes for the house in Orlando were prorated with $1,950 being apportioned to the seller and $1,650 being apportioned to the buyer. In December of the current year she paid $3,600 for property taxes.
Other information related to her return:
Salary from Farah Movie, lnc. | $30,000 |
Salary from Ocala Production, Inc. | 70,000 |
Federal income taxes withheld by Farah | 6,000 |
Federal income taxes withheld by Ocala | 22,000 |
FlCA taxes withheld by Farah | 2,295 |
FICA taxes withheld by Ocala | 5,355 |
Interest income from Sun National Bank | 1,800 |
Dividend income (qualifying dividends) | 10,000 |
Interest pa id for mortgage: | |
Home in California | 6,780 |
Home in Orlando | 3,800 |
Property taxes paid in California | 4,100 |
Sales taxes paid in California and Florida | 3,125 |
State income taxes paid in California | 2,900 |
a. Determine the amount of recognized gain on the sale of the residence.
b. Prepare Forms 3903, 8960, and 1040, including Schedules A, B, and D.
Step by Step Answer:
Federal Taxation 2020 Comprehensive
ISBN: 9780135196274
33rd Edition
Authors: Timothy J. Rupert, Kenneth E. Anderson, David S. Hulse