Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need the answer as soon as possible Exercise 1: (Tax Return Problem). Bert and Barbara Longfelt support in nursing homes both Bert's parents and
I need the answer as soon as possible
Exercise 1: (Tax Return Problem). Bert and Barbara Longfelt support in nursing homes both Bert's parents and Barbara's parents. Bert's parents are 70 and 68 years of age respectively and have no income except for the $3,600 in Social Security they receive annually. Barbara's parents, both 72 years of age, have the following sources of income: Social Security $9,800 Interest Income (Joint Ownership) S2,600 Dividend Income 5900 Bert's annual salary is $45,000 and his wife's annual salary is $55,000. They have two small children who live at home. Also, they own an apartment house from which they derive $6.000 net rental income. Two items from their rental property confused them so they did not include them in their rental income: Security deposits received and to be used against final month's rent $500 Two tenants paid rent in advance in December 2015. The rent was due January 1, 2016 5600 Barbara owned stock prior to her marriage to Bert and received the following cash dividends: General Corp. nonqualified common stock dividend (U.S. corporation) $300 Live Forever Life Insurance Co. (dividends on life insurance policy) $100 Bert and Barbara have several sources of interest income: Interest income from savings accounts $850 Interest income from State of Tennessee Highway Bonds $400 Barbara entered the local area bake-off, won first place for her cherry pie, and received a $1,000 cash prize. Bert, who is an accountant, made an arrangement with Harold the dentist. Bert would do Harold's tax work if Harold would take care of Bert and his family's dental work. During the year, Bert estimated that the value of his services to Harold was $500 and that Harold gave Bert and his family $600 worth of dental services. In December, Bert did a consulting assignment on a weekend and received $700. No Social Security or taxes were withheld. During the year, they had $15,000 withheld for federal taxes. During 2015, Bert and Barbara have $14,000 of itemized deductions. Compute Bert and Barbara's net tax due, including self-employment tax. Assume dividends are taxed at ordinary ratesStep 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