Mario and Kelsey are married (MFJ filing status) with no dependents. Mario works for an accounting firm and earned a salary of $95,000 during the year. Kelsey is a partner is a law firm, Brown, White & Black, LLC. (She materially participates in the partnership.) Kelsey's K-1 showed her share of the 2019 income/loss) to be ($24,000). Her basis in the partnership prior to the current year loss was $18,500. Mario is a limited partner (passive) in two different partnerships - X and Z. Partnership X reported his share of the current year income/loss to be ($17,000) and his basis prior to the current year loss was $14,000. Partnership Z reported his share of the current year income/loss to be $12,500 and his basis prior to the current year income was $7,000. Gain/Loss $4,000 $5,000) Additionally, the couple sold the following assets during the year: Asset Purchased Sold Cost Basis Sales Price ABC Stock 1/1/2019 7/1/2019 $18,000 $22,000 DEF Stock 1/1/2008 11/20/2019 $15,000 $10,000 Painting 1/1/2005 7/15/2019 $5,000 $50,000 (collectible) GH Stock 1/1/2010 9/1/2019 $18,000 $30,000 Rental Property* 1/1/2005 1/1/2019 $75,000 $130,000 JKL Stock 1/1/2015 10/1/2019 $10,000 $15,000 *Unrecaptured Sec. 1250 gain = $27,000 (The $27,000 is included in the $55,000) $45,000 $12,000 $55,000 $5,000 The taxpayers do not have any deductions for AGI or itemized deductions. Calculate taxpayers' gross income, adjusted gross income, taxable income and income tax liability for 2019. Be sure to show all calculations on the answer sheet including how much income is taxed at what tax rate. (Ignore net investment tax.) Mario and Kelsey are married (MFJ filing status) with no dependents. Mario works for an accounting firm and earned a salary of $95,000 during the year. Kelsey is a partner is a law firm, Brown, White & Black, LLC. (She materially participates in the partnership.) Kelsey's K-1 showed her share of the 2019 income/loss) to be ($24,000). Her basis in the partnership prior to the current year loss was $18,500. Mario is a limited partner (passive) in two different partnerships - X and Z. Partnership X reported his share of the current year income/loss to be ($17,000) and his basis prior to the current year loss was $14,000. Partnership Z reported his share of the current year income/loss to be $12,500 and his basis prior to the current year income was $7,000. Gain/Loss $4,000 $5,000) Additionally, the couple sold the following assets during the year: Asset Purchased Sold Cost Basis Sales Price ABC Stock 1/1/2019 7/1/2019 $18,000 $22,000 DEF Stock 1/1/2008 11/20/2019 $15,000 $10,000 Painting 1/1/2005 7/15/2019 $5,000 $50,000 (collectible) GH Stock 1/1/2010 9/1/2019 $18,000 $30,000 Rental Property* 1/1/2005 1/1/2019 $75,000 $130,000 JKL Stock 1/1/2015 10/1/2019 $10,000 $15,000 *Unrecaptured Sec. 1250 gain = $27,000 (The $27,000 is included in the $55,000) $45,000 $12,000 $55,000 $5,000 The taxpayers do not have any deductions for AGI or itemized deductions. Calculate taxpayers' gross income, adjusted gross income, taxable income and income tax liability for 2019. Be sure to show all calculations on the answer sheet including how much income is taxed at what tax rate. (Ignore net investment tax.)
