Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

John is in his mid-60s and is not married. At the age 55 he retired and sold his business, Buymore.com. Though John is retired, he

John is in his mid-60s and is not married. At the age 55 he retired and sold his business, Buymore.com. Though John is retired, he is a very active person. John reported the following information about his financial activity this year.

1. John won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal).

2. John sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share.

3. John received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $210,000.

4. John received $13,000 in disability benefits for the year. He purchased the disability insurance policy last year.

5. John decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car payment.

6. Johns son, Mike, instructed his employer to make half of his final paycheck of the year payable to John as a gift from Mike to John. John received the check on December 30 in the amount of $1,100.

7. John received a $610 refund of the $3,600 in state income taxes his employer withheld from his pay last year. John claimed $6,350 in itemized deductions last year (the standard deduction for a single filer was 6,300).

8. John received $30,000 of interest from corporate bonds and money market accounts.

Required: determine Johns gross income and complete page 1 of Form 1040 for John (forms can be downloaded from the IRS website).

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Total Quality Auditing

Authors: Amanda Jo Erven

1st Edition

1733784306, 978-1733784306

More Books

Students also viewed these Accounting questions

Question

What are the objectives of job evaluation ?

Answered: 1 week ago

Question

Write a note on job design.

Answered: 1 week ago

Question

Compute the derivative of f(x)cos(-4/5x)

Answered: 1 week ago

Question

Discuss the process involved in selection.

Answered: 1 week ago

Question

Evaluating Group Performance?

Answered: 1 week ago