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PROBLEMS 22. David and Rence Kimberly ages 75 and 65. respectively have the following sources of income 19. In January 2021. Leon McLeod received a gift of a beach cottage valued at $250,000 from his great-uncle who owned a number of such building. The cottage was rented cach year to college students who occupied it during the school year. The annual net rental income received is $20,000 per year. The 2021 tax return of McLeod would include what elements of this transaction Privatperson receipts Social Security Interest on bank deposits Dividends from comestic corporations Interest on terempt securities 520.000 12.000 2.500 2.000 700 20. The Hightown Council refused to increase the town budget. Robert Read was laid off from work on August 4, 2021. Earlier in the year he had been temporarily disabled from a job-related injury and had received disability benefits. At year-end Robert Read and his wife have the following sources of income Disability income $2.500 Unemployment compensation 5.000 Salary January 1-Aupa 4.2021 10.000 Wie's salary 9.000 Supplemental unemployment compensation er player provided 3.000 What amount of Read's family income was includible in gross income 21. In 2021. Windsor Knott, an employee of the Victoria Tie Company, was seriously injured in the factory stockroom. He was hospitalized for 30 days and lost partial use of his left hand. During his hospitalization and recovery period, he received the following Workers' compentation 5.9.000 Medical expenses reimbursement 50.000 Disability insurance benefits insurance 4.000 paid by taxpayer Accident and health insurance bene 9.500 company policy benefits based on the degree of permanent injury) Their itemized deductions total $11,000 Compute their taxable income. 23. Hi Tech Accounting Services changed its fringe benefit package as of the first of this year. Employees are now eligible to receive group term life insurance equal to twice their annual salary up to $100,000. Harry's salary is 590,000 per year. Prior to this year employees received group term life insurance up to $50,000. Harry is 52 years of age and has adjusted grow income of $78,000. Does Harry suffer any te consequences because of this change in policy? 24. Charles Adams, who is single, retired on March 3, 2021, at the age of 65. For the year 2021, he receives the following income: $14.000 Interest income Divided income Terempt come Social Security benefits 5.000 Net rental income Salary 2.000 1000 1000 6.000 What is Charles modified AGP Whar amount if any of his Social Security benefits must Charles include in his 2021 gross income! What is Charles taxable income for 2021? Determine Knoce's tax liability with regard to these payments. If the medical expenses had been deducted from Knott's 2021 tax return and reimbursement was received in 2022, how would the reimbursement be reflected in the 2022 return? 25. Felix Boots, a 35-year-old male, is vice 19 president of the Kitty-Lit Pet Products dos Company and earns $50,000 per year. Ono The company provides paid group-term 2 life insurance of twice the officers' salaries for all officers of the company. The cost of the policy to the company for Mr. Boots hasil is $650 per year. How much of the $650 air a must Felix include in his gross income? If I e s. Kitty-Lit changed its policy so as to enable ogol all employees to be covered at twice their il mi annual salary, what would Felix have to 11o include in his gross income? that 00
