Phil, 35 yearsold is an accountant. He receivesmedical insurance and fringe benefits from the employee. His wife,Sharon is 33 years old and works part time as office manager. They have 1 child, Amy 4 years old (qualifies for the $2,000 child care credit. They livein NYC and Sharon's mother cares for Amy at no cost.

Phil's Gross salary=$56,400

Sharon's salary=$22,000

Cash gift=$5,000

Interest Income from bankacc=$100

Federal income tax w/h=$2,500

State income tax=$3,680

Charitable contributions=$6,000

Rent paid=$10,000

Made a loan on March 1 in current year to a friend, who was starting abusiness.Principalamount was $10,000 pays interest on December 31 annually.Interest rate is 5%.

Calculate amount

(Loan was done as part of arm's length transaction.Interest was paid on time.)

Purchased 100 shares of IBM for $2,000 in April of this year and sold the stock for December for $1,500

Calculate amount

Municipal Bond Interest=$500

Purchased 100 shares of Disney for $5,000 and sold it for $1,000.Held the stock for 2 years

Calculate amount

Calculate Phil and Sharon's tax (liability) or refund?