Question
Carl Baker is a 63-year-old widower. He had income for 20XX as follows: Pension from former employee $39850 Interest income from Bean Bank $5500 Interest
Carl Baker is a 63-year-old widower. He had income for 20XX as follows:
Pension from former employee $39850
Interest income from Bean Bank $5500
Interest income on City of Bean bonds $4500
Dividends received from Costco stock held for over one year. $2000
Social security benefits $14000
Rent income on house $9000
Collections on annuity contract he purchased from Good Intentions Insurance: $5400
The cost of the annuity was $46800 and Carl was expected to receive a total of 260 monthly payments of $450. Carl has received 22 payments so far through 20XX.
Carls daughter, Sasha (who is 40 years old), borrowed $60k from Carl on January 5th, 20XX and used the proceeds to form a new business. He does not charge Sasha interest because she couldnt afford it. However, he does expect to collect the principal eventually. Sasha is living with Carl until the business becomes profitable. Except for housing, Sasha provides her own support from her business and $1600 in dividends on stocks she received/inherited from her mother.
Other relevant information on the rental home:
Utilities = $2800
Maintenance costs - $1000
Depreciation = $2000
Real estate taxes = $750
Insurance = $700
State income taxes paid = $3500
County personal property taxes paid = $2100
Payments FIT = $5900
Charitable contributions of cash to Bean Church = $7400
Federal interest rate 6%
Sales taxes paid = $912
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