ACC330 Federal Taxation - Problem Resolutions

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ACC330 - Federal Taxation Discussion Your firm has clients named Danny and Mary. They are married and have two dependent children. They also fully support Mary's mother, who lives with them and has no income. Their 2010 tax and other related information is as follows: Total salaries - $110,000 Bank account interest income - $3,500 Municipal bond interest income - $1,500 Danny has part-time consultant income of $7200 Rent income - $7,000 Rent expenses - $9,000 Value of employer-provided medical insurance - $5,500 Value of premiums for $50,000 of group term life insurance provided by employer - $500 Share of partnership income - $30,000 Partnership distribution - $10,000 Dividend income from ABC stock - $2,000 Loan from Danny's parents - $5,000 Gift from Danny's parents - $15,000 Total itemized deductions - $16,000 Determine Danny and Mary's taxable income. How you divide the work to accomplish the task is up to you. Should not use email or other forms of communication to resolve this problem. I anticipate you will use the IRS website for reference to publications or forms. Due for this question is on March 26th, 3PM CT. Thank you, Total salaries Taxable 11000 0 Bank account interest income Not Taxable 0 Municipal bond interest income Not Taxable 0 Danny has part-time consultant income Taxable 7200 Rent income No income is realized under income tax concepts of income until the home is sold. 0 Value of employer provided medical insurance Not Taxable 0 Value of premiums for $50,000 of group term life insurance provided by employer - $500 Not Taxable 0 Share of partnership income Taxable 30000 Partnership distribution Not Taxable 0 Dividend income from ABC stock Taxable 2000 Loan from Danny's parents Not Taxable 0 Gift from Danny's parents Not Taxable 0 AGI 14920 0 Total itemized deductions 16000 Personal exemption 3950 *5 19750 Taxable Income 1134 50