Answered step by step
Verified Expert Solution
Question
1 Approved Answer
63) During all of 2020, Mr. and Mrs. Clay lived with their four children (all are under the age of 17). They provided over one-half
63) During all of 2020, Mr. and Mrs. Clay lived with their four children (all are under the age of 17). They provided over one-half of the support for each child. Mr. and Mrs. Clay file jointly for 2020. Neither is blind, and both are under age 65. They reported the following tax-related information for the year. (Use the tax rate schedules, 2020 Salary income Prize from local radio station Medical expenses (no health insurance) Real estate taxes Alimony paid by Mr. Clay (divorced in 2015) Stat income taxes withheld in 2020 State income taxes paid with 2020 tax return (return was filed in April 2021) Federal income tax withholding Qualified home mortgage interest (acquisition debt of $300,000) Charitable contributions $ 125,000 1,500 4,000 4,200 12,000 1,800 1,500 7,500 15,000 9,000 What are the Clays' taxes payable or refund due? (Ignore the alternative minimum tax.) Todd Michael age 18, a distinguished young entrepreneur, earned the following items of income during 2020 even though he is still able to be a dependent on his parents' tax return. These were: 1) Net Income from Business: Flowers by Todd" 2) Interest Income 3) Dividends 4) 12 Self-Employment Tax Deduction 5) Self-Employment Tax $ 14,900 $ 3,900 $ 4,500 $ 982 $ 1,964 What amount of his taxable income will be taxed at his parents' rate (if any); and what amount will be taxed at his rate? Problem 64) You have just sold a house at Surfside Beach that you have had listed for sale for $500,000. You sold it for the following: Cash $150,000 ..... Buyer assumed your debt on the house of $100,000 Buyer also deeded you 10 acres and a cabin outside Asheville North Carolina that is valued at $300,000 ..... and, you agreed to assume the debt on the cabin and land in the amount of $75,000. The selling expenses on the sale are $40,000. You purchased the Surfside Beach House in 1989 for $75,000; and, you have made $50,000 in capital improvements on the property. You have never sustained a casualty loss nor did you ever rent the beach house out to claim any depreciation. Please show you work in determining the following: SHOW YOUR WORK !!!!!!!!!!! Amount Realized: Adjusted Basis: Gain / Loss Realized: Gain / Loss Recognized
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started