Paul and Donna Decker are married taxpayers, ages 44 and 42, who file a joint return for Year 1. Paul and Donna have two dependent children, Larry and Jane, ages 17 and 18, The couple also claims Paul's mother Hannah, age 66, as a dependent. Hannah received $7,500 in tax exempt social security. The Deckers estimate that they paid $2,500 of their own money to pay for Hannah's support and estimate that, although Hannah does not pay rent, the rental value of her room would be $200 per month. Paul sold 300 shares of Acme Corporation stock for $50 per share on May 3, Year 1. The Deckers had purchased the stock 10 years ago for $25 per share. They received dividends of S750 on the stock a month before the sale. In addition, Paul and Donna had the following items of income and deduction: Paul's salary S250,000 Paul's federal income tax withheld 56,770 Pauls' State income tax withheld 8,200 Donna's salary 56,000 Donna's federal income tax withheld 6,630 Donna's state income tax withheld 800 Home mortgage interest paid (mortgage principle is $600,000) 7,890 Interest on personal auto loan (not deductible) 1,660 Interest on Visa Card (not deductible) 620 Doctor and hospital bills (including S380 for Hannah and $850 for the children) 9,700 Medical insurance reimbursement 1.430 Prescription drugs Medical insurance premiums 3,810 Real estate taxes paid 8,850 Cash contributions to church 8,500 Value of service to the local library 740 Paul's unreimbursed employee expenses to attend hotel management convention (airfare $340, hotel S170, meals $95, registration foe 340) 945 Compute net tax payable or refund due for the Deckers for Year 1. Ignore any credits for which they might be eligible. 640 Medical insurance reimbursement 1.430 Prescription drugs 640 Medical insurance premiums 3,810 Real estate taxes paid 8,850 Cash contributions to church 8,500 Value of service to the local library 740 Paul's unreimbursed employee expenses to attend hotel management convention (airfare $340, hotel $170, meals $95, registration fee 340) 945 Compute net tax payable or refund due for the Deckers for Year 1. Ignore any credits for which they might be eligible. 1. What is the gain or loss on the sale of Acme Corp, stock? (10 pts) 2. What is Paul and Donna's AGI? (10 pts) 2018 Individual Tax Brackets Income Tax For Single Taxpayers Taxable income But Not Over (S) Over (S) 0 9,525 9,525 38,700 38,700 82,500 82,500 157,500 157,500 200,000 200,000 500,000 500,000 The Taxis Of the Amount Over $0 + 10% $0 $952.50 + 12% $9,525 $4,453.50 + 22% $38,700 $14,089.50 + 24% $82,500 $32,089.50 + 32% $157,500 $45,689.50 + 35% $200,000 $150,689.50 + 37% $500,000 For Married Taxpayers Filing Joint Returns and Surviving Spouses The Taxis Taxable income of the But Not Amount Over (5) Over $1 Over 0 19,050 $0 + 10% $0 19,050 77,400 $1,905 + 12% $19,050 77,400 165,000 $8,907 +22% $77,400 165,000 315,000 $28,179 + 24% $165,000 315,000 400,000 $64,179 + 32% $315,000 400,000 600,000 $91,379 + 35% $400,000 600,000 $161,379 +37% $600,000 For Married Taxpayers Filing Separate Returns The Tax is Taxable income Of the But Not Amount Over ($) Over (S) Over 0 9,525 $0 + 10% $0 9,525 38,700 $952.50 +12% $9,525 38,700 82,500 $4,453.50 + 22% $38,700 82,500 157,500 $14,089.50 + 24% $82,500 157,500 200,000 $32,089.50 + 32% $157,500 200,000 300,000 $45,689.50 + 35% $200,000 300,000 $80,689.50 + 37% $300,000 For Individuals Filing as Head of Household The Taxis Taxable income Of the Bik Not Amount Over ($) Over (S Over 0 13,600 $0 + 10% $0 13,600 51,800 $1,360 + 12% $13,600 51,800 82,500 $5,944 + 22% $51,800 82,500 157,500 $12,698 + 24% $82,500 157,500 200,000 $30,698 + 32% $157,500 200,000 500,000 $44,298 + 35% $200,000 500,000 $149,298 + 37% $500,000 - Paul and Donna Decker are married taxpayers, ages 44 and 42, who file a joint return for Year 1. Paul and Donna have two dependent children, Larry and Jane, ages 17 and 18, The couple also claims Paul's mother Hannah, age 66, as a dependent. Hannah received $7,500 in tax exempt social security. The Deckers estimate that they paid $2,500 of their own money to pay for Hannah's support and estimate that, although Hannah does not pay rent, the rental value of her room would be $200 per month. Paul sold 300 shares of Acme Corporation stock for $50 per share on May 3, Year 1. The Deckers had purchased the stock 10 years ago for $25 per share. They received dividends of S750 on the stock a month before the sale. In addition, Paul and Donna had the following items of income and deduction: Paul's salary S250,000 Paul's federal income tax withheld 56,770 Pauls' State income tax withheld 8,200 Donna's salary 56,000 Donna's federal income tax withheld 6,630 Donna's state income tax withheld 800 Home mortgage interest paid (mortgage principle is $600,000) 7,890 Interest on personal auto loan (not deductible) 1,660 Interest on Visa Card (not deductible) 620 Doctor and hospital bills (including S380 for Hannah and $850 for the children) 9,700 Medical insurance reimbursement 1.430 Prescription drugs Medical insurance premiums 3,810 Real estate taxes paid 8,850 Cash contributions to church 8,500 Value of service to the local library 740 Paul's unreimbursed employee expenses to attend hotel management convention (airfare $340, hotel S170, meals $95, registration foe 340) 945 Compute net tax payable or refund due for the Deckers for Year 1. Ignore any credits for which they might be eligible. 640 Medical insurance reimbursement 1.430 Prescription drugs 640 Medical insurance premiums 3,810 Real estate taxes paid 8,850 Cash contributions to church 8,500 Value of service to the local library 740 Paul's unreimbursed employee expenses to attend hotel management convention (airfare $340, hotel $170, meals $95, registration fee 340) 945 Compute net tax payable or refund due for the Deckers for Year 1. Ignore any credits for which they might be eligible. 1. What is the gain or loss on the sale of Acme Corp, stock? (10 pts) 2. What is Paul and Donna's AGI? (10 pts) 2018 Individual Tax Brackets Income Tax For Single Taxpayers Taxable income But Not Over (S) Over (S) 0 9,525 9,525 38,700 38,700 82,500 82,500 157,500 157,500 200,000 200,000 500,000 500,000 The Taxis Of the Amount Over $0 + 10% $0 $952.50 + 12% $9,525 $4,453.50 + 22% $38,700 $14,089.50 + 24% $82,500 $32,089.50 + 32% $157,500 $45,689.50 + 35% $200,000 $150,689.50 + 37% $500,000 For Married Taxpayers Filing Joint Returns and Surviving Spouses The Taxis Taxable income of the But Not Amount Over (5) Over $1 Over 0 19,050 $0 + 10% $0 19,050 77,400 $1,905 + 12% $19,050 77,400 165,000 $8,907 +22% $77,400 165,000 315,000 $28,179 + 24% $165,000 315,000 400,000 $64,179 + 32% $315,000 400,000 600,000 $91,379 + 35% $400,000 600,000 $161,379 +37% $600,000 For Married Taxpayers Filing Separate Returns The Tax is Taxable income Of the But Not Amount Over ($) Over (S) Over 0 9,525 $0 + 10% $0 9,525 38,700 $952.50 +12% $9,525 38,700 82,500 $4,453.50 + 22% $38,700 82,500 157,500 $14,089.50 + 24% $82,500 157,500 200,000 $32,089.50 + 32% $157,500 200,000 300,000 $45,689.50 + 35% $200,000 300,000 $80,689.50 + 37% $300,000 For Individuals Filing as Head of Household The Taxis Taxable income Of the Bik Not Amount Over ($) Over (S Over 0 13,600 $0 + 10% $0 13,600 51,800 $1,360 + 12% $13,600 51,800 82,500 $5,944 + 22% $51,800 82,500 157,500 $12,698 + 24% $82,500 157,500 200,000 $30,698 + 32% $157,500 200,000 500,000 $44,298 + 35% $200,000 500,000 $149,298 + 37% $500,000