Question 2 Amelia, a cash method taxpayer, knows that you are currently taking the Tax class and asks for your help Below are Amelia items of income in 2020 that she emailed you Salary from being an employee at HEB $60k Alimony payment received from ex husband $12k Money received from selling artworks on Etsy $5k Other than those items above, Amelia also told you about a few other things happened in 2020 Although Amelia do not include these items in the email, as a tax student, you are aware that they might be taxable, but you are not sure yet She won a Gucci handbag when being the 1,000th customer to enter the store on July 4th, 2020 when window shopping The bag is sold in store for $2k By being a dedicated employee, Amelia received an employee of the year award of $300 HEB gift card from her company (HEB) HEB gave Amelia a $200 downtown parking prepaid card each month because part of her job requires commuting between the HEB headquarter to downtown San Antonio In total, Amelia had received $2,400 in prepaid parking card in 2020 What amount is included in Amy's gross income in 2020 Show calculations and explanations Page 2 of 4 Question 3 Abdu have the following items in 2020 His AGI before any items below is $40k Abdu partially own a bar in downtown Austin, TX Most work is done by the manager (his friend) and Abdu only job is to collect money from the store each month The Austin bar bring Abdu $15k income Abdu is a partner in AbduHippity LLC and has the tax basis of $70k Amazon LLC has a loss and Abdu's share of the loss is $60k Abdu do not actively work for AbduHippity LLC Abdu invest in stock and has a $3k short term capital gain and $1k dividend income Abdu has a summer home which he rent out for the full year of 2020 The rental house results in a $5k loss Abdu actively work as a managing partner at AbduHop LLC, with his share of income is $12k How much loss from his businesses rental can Abdu deduct in 2020 How much of the loss is carried forward Show calculations and explanations Question 4 Austin, your high school friend, has the following expenses in 2020 Austin is not sure how to treat them for his tax purpose in 2020 so he asked for your help Due to COVID 19, Austin has to work from home Austin spent $10k out of pocket on the following which his employer reimburses nothing o Standingdesk$1k o Computersystem $8k o Microphoneandwebcamsystemforconferencecall $1k Austin has a 2nd home in Galveston where he rent out on Airbnb for the whole year of 2020 Austin planned to visit this home and stay there for a week in July 2020, but due to the COVID 19, he did not Below are the items associated with the home o Totalincome(beforeanyexpenses) $20k o Totalexpenses $30k Austin had to relocate back to his hometown from his workplace city because of COVID 19 The total expenses related to moving back to his hometown is $1k Austin contribute to both traditional IRA and Roth IRA in 2020 Austin contributed $3k into his traditional IRA and another $3k to his Roth IRA a)Calculate total deduction from the items above Point out what type of deduction they are and provide detail calculations and explanations b)Is there any loss that Austin can claim in 2020 Is there any loss that need to be carried forward Page 3 of 4 Question 5 Short answers, a, b, and c are unrelated a) Fill in the table below and answer the following question Stock Stock A Stock B Stock C Stock D Date Bought 12 22 2018 1 11 2011 2 2 2020 9 5 2020 Basis $ 5,000 $ 1,000 $ 3,000 $ 10,000 Date Sold 1 22 2020 1 11 2020 5 10 2020 10 5 2020 Proceed $ 1,000 $ 3,000 $ 10,000 $ 8,000 Amount realized LT ST What is the net capital gain loss and is it LT (long term) or ST (short term) If no netting needed, write No netting needed, the total LT is , the total ST is b)If I am a restaurant owner, what might be some deductions that are directly related to business activities List at least 5 items c)Describe the individual who is very likely to have the following additional tax liabilities tax benefits scenario below a Alternative Minimum Tax (AMT) b Earned income tax credit c Deduction for Qualified Business Income (DQBI) Fed income tax brackets Single Tax rate Taxable income bracket Tax owed 10 $0 to $9,875 10 of taxable income 12 $9,876 to $40,125 $987 50 plus 12 of the amount over $9,875 22 $40,126 to $85,525 $4,617 50 plus 22 of the amount over $40,125 24 $85,526 to $163,300 $14,605 50 plus 24 of the amount over $85,525 32 $163,301 to $207,350 $33,271 50 plus 32 of the amount over $163,300 35 $207,351 to $518,400 $47,367 50 plus 35 of the amount over $207,350 37 $518,401 or more $156,235 plus 37 of the amount over $518,400 Married filing jointly Tax rate Taxable income bracket Tax owed 10 $0 to $19 750 10 of taxable income 12 $19 751 to $80 250 $1 975 plus 12 of the amount over $19 750 22 $80 251 to $171 050 $9 235 plus 22 of the amount over $80 250 24 $171 051 to $326 600 $29 211 plus 24 of the amount over $171 050 32 $326 601 to $414 700 $66 543 plus 32 of the amount over $326 600 35 $414 701 to $622 050 $94 735 plus 35 of the amount over $414 700 37 $622 051 or more $167 307 50 plus 37 of the amount over $622 050 Married filing separately Tax rate Taxable income bracket Tax owed 10 $0 to $9 875 10 of taxable income 12 $9 876 to $40 125 $987 50 plus 12 of the amount over $9 875 22 $40 126 to $85 525 $4 617 50 plus 22 of the amount over $40 125 24 $85 526 to $163 300 $14 605 50 plus 24 of the amount over $85 525 32 $163 301 to $207 350 $33 271 50 plus 32 of the amount over $163 300 35 $207 351 to $311 025 $47 367 50 plus 35 of the amount over $207 350 37 $311 026 or more $83 653 75 plus 37 of the amount over $311 025 Head of household Tax rate Taxable income bracket Tax owed 10 $0 to $14 100 10 of taxable income 12 $14 101 to $53 700 $1 410 plus 12 of the amount over $14 100 22 $53 701 to $85 500 $6 162 plus 22 of the amount over $53 700 24 $85 501 to $163 300 $13 158 plus 24 of the amount over $85 500 32 $163 301 to $207 350 $31 830 plus 32 of the amount over $163 300 35 $207 351 to $518 400 $45 926 plus 35 of the amount over $207 350 37 $518 401 or more $154 793 50 plus 37 of the amount over $518 4002020 Standard Deduction Filing Status Deduction Amount Single $12 400 Married Filing Jointly $24 800 Head of Household $18 650 2020 Child Tax Credit $2000 child 2020 Tax Rates on Long Term Capital Gains For Unmarried Individuals For Married Individuals Filing Joint Returns For Heads of Households Tax Rate Taxable Income Over $0 $0 150 $40 000 $80 000 $53 600 20 $441 450 $496 600 $469 050 Additional Net Investment Income Tax 3 80 MAGIabove $200 000 MAGIabove $250 000 MAGIahove $200 000

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Question 2: Amelia, a cash method taxpayer, knows that you are currently taking the Tax class and asks for your help. Below are Amelia items

Question 2:

Amelia, a cash method taxpayer, knows that you are currently taking the Tax class and asks for your help. Below are Amelia items of income in 2020 that she emailed you:

Salary from being an employee at HEB: $60k
Alimony payment received from ex-husband: $12k.
Money received from selling artworks on Etsy: $5k
Other than those items above, Amelia also told you about a few other things happened in 2020. Although Amelia do not include these items in the email, as a tax student, you are aware that they might be taxable, but you are not sure yet:
She won a Gucci handbag when being the 1,000th customer to enter the store on July 4th, 2020 when window shopping. The bag is sold in store for $2k
By being a dedicated employee, Amelia received an employee of the year award of $300 HEB gift card from her company (HEB)
HEB gave Amelia a $200 downtown parking prepaid card each month because part of her job requires commuting between the HEB headquarter to downtown San Antonio. In total, Amelia had received $2,400 in prepaid parking card in 2020.
What amount is included in Amy's gross income in 2020? Show calculations and explanations.

Page 2 of 4

Question 3:

Abdu have the following items in 2020. His AGI before any items below is $40k.

Abdu partially own a bar in downtown Austin, TX. Most work is done by the manager (his friend) and Abdu only job is to collect money from the store each month. The Austin bar bring Abdu $15k income.
Abdu is a partner in AbduHippity LLC and has the tax-basis of $70k. Amazon LLC has a loss and Abdu's share of the loss is $60k. Abdu do not actively work for AbduHippity LLC.
Abdu invest in stock and has a $3k short-term capital gain and $1k dividend income
Abdu has a summer home which he rent out for the full year of 2020. The rental house results in
a $5k loss
Abdu actively work as a managing partner at AbduHop LLC, with his share of income is $12k
How much loss from his businesses/rental can Abdu deduct in 2020? How much of the loss is carried forward? Show calculations and explanations.
Question 4:
Austin, your high school friend, has the following expenses in 2020. Austin is not sure how to treat them for his tax purpose in 2020 so he asked for your help.
Due to COVID-19, Austin has to work from home. Austin spent $10k out-of-pocket on the following which his employer reimburses nothing:
o Standingdesk$1k
o Computersystem:$8k
o Microphoneandwebcamsystemforconferencecall:$1k
Austin has a 2nd home in Galveston where he rent out on Airbnb for the whole year of 2020. Austin planned to visit this home and stay there for a week in July 2020, but due to the COVID- 19, he did not. Below are the items associated with the home:
o Totalincome(beforeanyexpenses):$20k
o Totalexpenses:$30k
Austin had to relocate back to his hometown from his workplace city because of COVID-19. The
total expenses related to moving back to his hometown is $1k.
Austin contribute to both traditional IRA and Roth IRA in 2020. Austin contributed $3k into his
traditional IRA and another $3k to his Roth IRA.

a)Calculate total deduction from the items above. Point out what type of deduction they are and provide detail calculations and explanations.
b)Is there any loss that Austin can claim in 2020? Is there any loss that need to be carried forward?

Page 3 of 4

Question 5: Short answers, a, b, and c are unrelated.

a) Fill in the table below and answer the following question

Stock

Stock A Stock B Stock C Stock D

Date Bought

12/22/2018 1/11/2011 2/2/2020 9/5/2020

Basis

$ 5,000 $ 1,000 $ 3,000 $ 10,000

Date Sold

1/22/2020 1/11/2020 5/10/2020 10/5/2020

Proceed

$ 1,000 $ 3,000 $ 10,000 $ 8,000

Amount realized

LT/ST

What is the net capital gain/loss and is it LT (long- term) or ST (short-term)? If no netting needed, write "No netting needed, the total LT is..., the total ST is ..."

b)If I am a restaurant owner, what might be some deductions that are directly related to business activities? List at least 5 items.
c)Describe the individual who is very likely to have the following additional tax liabilities/ tax benefits scenario below?
a. Alternative Minimum Tax (AMT)
b. Earned income tax credit
c. Deduction for Qualified Business Income (DQBI)

Fed income tax brackets Single Tax rate Taxable income bracket Tax owed 10% $0 to $9,875 10% of taxable income 12% $9,876 to $40,125 $987.50 plus 12% of the amount over $9,875 22% $40,126 to $85,525 $4,617.50 plus 22% of the amount over $40,125 24% $85,526 to $163,300 $14,605.50 plus 24% of the amount over $85,525 32% $163,301 to $207,350 $33,271.50 plus 32% of the amount over $163,300 35% $207,351 to $518,400 $47,367.50 plus 35% of the amount over $207,350 37% $518,401 or more $156,235 plus 37% of the amount over $518,400 Married filing jointly Tax rate Taxable income bracket Tax owed 10% $0 to $19.750 10% of taxable income 12% $19.751 to $80.250 $1.975 plus 12% of the amount over $19.750 22% $80.251 to $171.050 $9.235 plus 22% of the amount over $80.250 24% $171.051 to $326.600 $29.211 plus 24% of the amount over $171.050 32% $326.601 to $414.700 $66.543 plus 32% of the amount over $326.600 35% $414.701 to $622.050 $94.735 plus 35% of the amount over $414.700 37% $622.051 or more $167.307.50 plus 37% of the amount over $622.050 Married filing separately Tax rate Taxable income bracket Tax owed 10% $0 to $9.875 10% of taxable income 12% $9.876 to $40.125 $987.50 plus 12% of the amount over $9.875 22% $40.126 to $85.525 $4.617.50 plus 22% of the amount over $40.125 24% $85.526 to $163.300 $14.605.50 plus 24% of the amount over $85.525 32% $163.301 to $207.350 $33.271.50 plus 32% of the amount over $163.300 35% $207.351 to $311.025 $47.367.50 plus 35% of the amount over $207.350 37 $311.026 or more $83.653.75 plus 37% of the amount over $311.025 Head of household Tax rate Taxable income bracket Tax owed 10% $0 to $14.100 10% of taxable income 12% $14.101 to $53.700 $1.410 plus 12% of the amount over $14.100 22% $53.701 to $85.500 $6.162 plus 22% of the amount over $53.700 24% $85.501 to $163.300 $13.158 plus 24% of the amount over $85.500 32% $163.301 to $207.350 $31.830 plus 32% of the amount over $163.300 35% $207.351 to $518.400 $45.926 plus 35% of the amount over $207.350 37 $518.401 or more $154.793.50 plus 37% of the amount over $518.4002020 Standard Deduction Filing Status Deduction Amount Single $12.400 Married Filing Jointly $24.800 Head of Household $18.650 2020 Child Tax Credit $2000/child 2020 Tax Rates on Long Term Capital Gains For Unmarried Individuals For Married Individuals Filing Joint Returns For Heads of Households Tax Rate Taxable Income Over $0 $0 150% $40 000 $80 000 $53 600 20% $441 450 $496 600 $469 050 Additional Net Investment Income Tax 3 80% MAGIabove $200 000 MAGIabove $250 000 MAGIahove $200 000