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43.Although Hank is retired, he is an excellent handyman and often works part time on small projects for neighbors and friends. Last week his neighbor,
43.Although Hank is retired, he is an excellent handyman and often works part time on small projects for neighbors and friends. Last week his neighbor, Mike, offered to pay Hank $500 for minor repairs to his house. Hank completed the repairs in December of this year. Hank uses the cash method of accounting and is a calendar-year taxpayer. Compute Hank's gross income for this year from each of the following alternative transactions: a) Mike paid Hank $200 in cash in December of this year and promised to pay the remaining $300 with interest in three months. b) Mike gave Hank tickets in December to the big game in January. The tickets have a face value of $50, but Hank could sell them for $400. Hank went to the game with his son. c) Mike bought Hank a new set of snow tires. The tires typically sell for $500, but Mike bought them on sale for $450. 2021 Tax Rate Schedules Individuals Schedule XSingle If taxable income is But not over: over: The tax is: $ 0 $ 9.950 10% of taxable income $ 9,950 $ 40,525 $995 plus 12% of the excess over $9.950 $ 40,525 $ 86,375 $4,664 plus 22% of the excess over $40.525 $ 86,375 $164,925 $14,751 plus 24% of the excess over $86,375 $164.925 $209,425 $33,603 plus 32% of the excess over $164,925 $209,425 $523,600 547,843 plus 35% of the excess over $209,425 $523,600 $157,804.25 plus 37% of the excess over $523,600 Schedule 7Head of Household If taxable income is But not over: over: The tax is: $ $ 14,200 10% of taxable income $ 14,200 $ 54,200 $1,420 plus 12% of the excess over $14,200 S 54,200 $ 86,350 $6,220 plus 22% of the excess over $54.200 $ 86,350 $164,900 $13,293 plus 24% of the excess over 586,350 $164,900 $209,400 $32,145 plus 32% of the excess over $164.900 $209,400 $523,600 $46,385 plus 35% of the excess over $209,400 $523,600 $156,355 plus 37% of the excess over S523,600 over: Schedule Y-1-Married Filing Jointly or Qualifying Widow(er) If taxable income is But not over: over: The tax is: $0 $ 19,900 10% of taxable income $ 19,900 $ 81,050 $1,990 plus 12% of the excess over $19,900 $ 81,050 $172,750 $9,328 plus 22% of the excess over $81,050 $172,750 $329,850 $29,502 plus 24% of the excess over $172,750 $329,850 $418,850 $67,206 plus 32% of the excess over $329,850 $418,850 $628,300 $95,686 plus 35% of the excess over $418,850 $628,300 $ $168.993.50 plus 37% of the excess over $628,300 Schedule Y-2Married Filing Separately If taxable income is But not over: The tax is: $ 0 $ 9,950 10% of taxable income $ 9,950 $ 40,525 $995 plus 12% of the excess over $9.950 $ 40,525 $ 86,375 $4,664 plus 22% of the excess over $40.525 $ 86,375 $164,925 $14,751 plus 24% of the excess over $86,375 $164.925 $209,425 $33,603 plus 32% of the excess over $164.925 $209,425 $314,150 $47,843 plus 35% of the excess over $209,425 $314,150 $84,496.75 plus 37% of the excess over $314.150 Estates and Trusts If taxable income is over: $ 0 $ 2,650 But not over: $ 2,650 $ 9,550 The tax is: : 10% of taxable income $265 plus 24% of the excess over $2,650 $1,921 plus 35% of the excess over 59,550 $3,146 plus 37% of the excess over $13,050 $ 9.550 $13.050 $13,050
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