Blake and Valerie Meyer (both age 30) are married with one dependent child (age 5).

Blakes gross salary from his corporate employer was $70,000, and his Section 401(k) contribution was $6,300. (63,700 O.I.)

Valeries salary from GuiTech, an S corporation, was $29,400.

Valerie owns 16 percent of GuiTechs outstanding stock. Her pro rata share of GuiTechs ordinary business income was $13,790, her pro rata share of GuiTechs net loss from rental real estate was $8,100, and she received a $7,000 cash distribution from GuiTech. The ordinary income from GuiTech is qualified business income.

Blake received a $15,000 cash gift from his grandmother. (Should be included with whomever gives the gift)

Valerie won $6,400 in the Maryland state lottery. (must be included)

The Meyers received a distribution from their investment in Pawnee Mutual Fund that consisted of a $712 qualifying dividend and a $3,020 long-term capital gain. (Capital Gains Rate)

Blake paid $12,000 alimony to a former spouse under a divorce agreement executed in 2011. (Still above the line deduction Dec. 31,2018 new law in effect)

The Meyers paid $14,200 home mortgage interest on acquisition debt and $2,780 property tax on their personal residence. (2,780 is disallowed under new limitations)

The Meyers paid $7,000 state income tax and $4,200 state and local sales tax. (Apply new limitations on SALT, (10,000 deduction)

164

allowes either state and local income taxes OR state and local sales tax but not both, (MFJ 10,000/ Single 5,000)

Valerie contributed $1,945 to the First Baptist Church. On the basis of the above information, compute the Meyers 2018 federal income tax (including any AMT) on their joint return.

Assume the taxable year is 2018. Use Individual tax rate schedules, Standard deduction table and Tax rates for capital gains and qualified dividends. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

known & questions:

AMT is 0.00

199A?

S corporation passive income meets qualifications of limitation?

Adj. Basis Scorp stock is not given, cash distribtions normally not taxable otherwise

tax brackets MFJ

19050-77400 is 12% +1905

77400-165,000 is 22% +8907

0-77,200 is 0% taxable Income

77201-479000 is 15% taxable Income