I.

Caleb is single. Calculate Taxable Income for Caleb Carter for 2020, based on the following Information:

Salary $100,000

Caleb inherited $400,000 from his great grandfather

Interest on Florida Bond $20,000

Treasury Bill Interest $10,000

Dividends $50,000

Calebs brother repaid him a $40,000 loan from 2015

Caplital gain $30,000

Sole Proprietorship loss $50,000

Caleb found $20,000 on the beach

Caleb received a $100,000 gift from his mother

Caleb won a bowling contest $10,000

Caleb won $5,000 at bowling

Caleb was the beneficiary of his great uncles life insurance policy $100,000

Caleb received a $40,000 legal settlement for a broken arm sustained when Caleb fell at Macys Partnership income $30,000

Contribution to health savings account $2,000

Self employment tax paid $10,000

Alimony paid $40,000. The divorce decree was signed in 2020.

Contribution to qualified retirement account $1,000

Real estate taxes $20,000

State income tax $10,000

Mortgage interest $90,000, the $3,000,000 mortgage was signed in 2020.

Medical Expenses $50,000

Charitable contribution to American Heart Association $20,000.

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II Calculate Federal Tax Liability for 2020, for the following taxpayers:

• Keira Kennys taxable income for 2020 was $280,000. Keira files married separate.

• Lolo Jones taxable income for 2020 was $190,000. Lolo is single.

• Darby Douglass taxable income for 2020 was $200,000, Darby is the head of household

• Joslyn and Joseph Jackson had taxable income of $400,000 in 2020, The Jacksons file married joint.

• Sarah Smith had taxable income of $175,000 in 2020. Sarah is a surviving spouse.

Use the tax tables provided in the lecture notes to calculate the federal tax liability