Paden, who is single and has been employed as an accountant for 30 years with Harper, Inc., lost his job due to company downsizing. His last day of employment is July 31, 2019, and Corporation provides a $9,000 severance payment. The severance payments are based on an employee's time of employment. During the year, Paden received a salary from Corporation of $56,000. Corporation also paid $8,500 of Paden's medical insurance premiums. <\/p>
In May 2019, Paden, who had always wanted to be associated with a football team, applied for the head coaching job at Hawk University in Iowa and, much to his surprise, received the job beginning on August 1. In June and July, Paden paid $4,500 to take courses in sports management at the local university. Hawk University is substantially short of funding and Paden paid $2,000 for entertainment expenses related to his job and $500 for supplies. No reimbursement was received. <\/p>
His salary from Hawk is $5,000 per month payable at the end of each month. His salary for December was not received until January 6, 2020. <\/p>
On August 1, he sold his house for $329,000 and paid a sales commission of $14,000. He inherited the house 20 years ago when his mother died. Her basis for the house was $37,000 and the FMV when she died was $50,000. Property taxes for the 2019 calendar year amount to $3,600, and property taxes were apportioned at the closing. Property taxes are payable on October 1. He paid $2,100 of interest on home equity debt of $30,000, incurred to purchase a new car. <\/p>
To move to Iowa, he drove 700 miles and spent $62 for meals during the trip in July. Movers charged $4,150 to move his household items. He purchased a new house in Iowa for $150,000 on August 15 and borrowed $110,000. He also agreed to pay all property taxes for 2019. Real property taxes for the home in Iowa will be paid on January 30, 2020, and amount to $1,500. <\/p>
Interest on the $110,000 debt during the current year is $1,930. To obtain the loan, Paden paid points of $1,000. <\/p>
He contributed common stock (basis of $1,000 and FMV of $6,000) held as an investment for three years to Hawk University. He also paid state income taxes of 1,765 (Which was greater than state sales taxes for the year) as well as personal property taxes of $435 for his car. <\/p>
Paden sold 200 shares of Dell Corporation stock on April 10 for $100 per share. His basis was $145 per share. On May 1, he purchased 300 shares of Dell at $89 per share.<\/p>
Determine:<\/p>
1. gross income without considering the sale of his house or the Dell Corporation stock.<\/p>
2. recognized gain due to the sale of his house.<\/p>
3. net capital gain.<\/p>
4. adjusted gross income.<\/p>
5. total amount of itemized deductions.<\/p>
6. taxable income.<\/p>
7. basis of his house in Iowa.<\/p>
8. if the sales price for his home was $470,000 instead of $370,000, would his taxable<\/p>
income increase by more than $100,000. If yes, explain.<\/p>", "transcribed_text": "", "related_book": { "title": "Auditing and Assurance Services", "isbn": "978-1259573286, 1259573281, 978-1260152166", "edition": "7th edition", "authors": "Timothy Louwers, Allen Blay, David Sinason, Jerry Strawser, Jay Thibodeau", "cover_image": "https:\/\/dsd5zvtm8ll6.cloudfront.net\/si.question.images\/book_images\/1263.jpg", "uri": "\/textbooks\/auditing-and-assurance-services-7th-edition-1263", "see_more_uri": "" }, "free_related_book": { "isbn": "1535333383", "uri": "\/textbooks\/a-pharmacists-guide-to-inpatient-medical-emergencies-how-to-respond-to-code-blue-rapid-response-calls-and-other-medical-emergencies-1st-edition-978-1535333382-266477", "name": "A Pharmacists Guide To Inpatient Medical Emergencies How To Respond To Code Blue Rapid Response Calls And Other Medical Emergencies", "edition": "1st Edition" }, "question_posted": "2024-06-28 04:47:37", "see_more_questions_link": "\/study-help\/questions\/business-economics-2023-September-08", "step_by_step_answer": "The Answer is in the image, click to view ...", "students_also_viewed": [ { "url": "\/why-should-auditors-always-select-the-auditees-adjusting-journal-entries", "description": "Why should auditors always select the auditees adjusting journal entries for detail audit?", "stars": 3 }, { "url": "\/study-help\/psychology\/list-several-personal-qualities-that-help-people-to-be-happy-1982767", "description": "List several personal qualities that help people to be happy.", "stars": 3 }, { "url": "\/the-following-events-apply-to-milligan-manufacturing-company-assume-that", "description": "The following events apply to Milligan Manufacturing Company. Assume that all transactions are cash transactions unless otherwise indicated. Transactions for the 2017 Accounting Period 1. The company...", "stars": 3 }, { "url": "\/study-help\/questions\/apple-offers-sales-price-discounts-to-college-students-apple-can-9850289", "description": "Apple offers sales price discounts to college students. Apple can use sales variance analysis to assess the effects of these sales discounts. Assumed data for a local college follow. AQ= Actual...", "stars": 3 }, { "url": "\/study-help\/questions\/15-and-16-15-5pts-the-fx-rate-has-changed-7549911", "description": "15 and 16 15. (5pts) The FX rate has changed from $1.10\/euro to si.20\/euro. Calculate the percentage change of FX rate and define how the value of euro has changed? 16. (5pts) Calculate the value of...", "stars": 3 }, { "url": "\/study-help\/questions\/you-are-an-accounting-associate-assisting-a-compliance-officer-of-1375246", "description": "You are an accounting associate assisting a compliance officer of a large private company. The compliance officer recently investigated concerns about accounting irregularities in journal entries...", "stars": 3 }, { "url": "\/study-help\/questions\/a-pharmacy-has-four-counter-to-serve-blood-pressure-test-1375719", "description": "A Pharmacy has four counter to serve Blood pressure test for customer. Customers arrive according to a Poisson distribution at the rate of 1 every 10 minutes. However, only 85% seek service at the...", "stars": 3 }, { "url": "\/study-help\/questions\/the-document-that-governs-the-relationship-between-the-anote-holder-1377449", "description": "The document that governs the relationship between the A-Note holder and the B-Note holder is the a)Subordination Agreement b)Intercreditor Agreement c)Participation or Co-lender Agreement...", "stars": 3 }, { "url": "\/study-help\/questions\/select-the-misleading-graph-line-chart-of-monthly-average-temperature-1377847", "description": "Select the misleading graph. Line chart of Monthly average temperature. Month is on the x axis and average temperature is on the y-axis. Scatterplot with rainfall on the x-axis and tree density on...", "stars": 3 }, { "url": "\/study-help\/questions\/greece-is-now-subject-to-enhanced-supervision-by-euro-zone-2941204", "description": "Greece is now subject to \"enhanced supervision\" by euro zone creditors, having exited the bail- out programme in August 2018. The government has committed to meeting annual primary budget __________...", "stars": 3 } ], "next_back_navigation": { "previous": "\/study-help\/questions\/12-which-of-the-following-capital-budgeting-techniques-explicitly-takes-4242859", "next": "\/study-help\/questions\/on-january-1-2013-plano-company-acquired-8-percent-20800-4242861" }, "breadcrumbs": [ { "name": "Study help", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers" }, { "name": "Business", "link": "https:\/\/www.solutioninn.com\/study-help\/questions-and-answers\/business" }, { "name": "Accounting", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/business-accounting" }, { "name": "Paden, who is single and has been employed as an accountant for", "link": "https:\/\/www.solutioninn.com\/study-help\/questions\/paden-who-is-single-and-has-been-employed-as-an-4242860" } ], "skill_details": { "skill_id": "9", "skill_name": "Accounting", "parent_id": "1" } } } }