Question
Tax return problem Mr and Mrs Sam Morris retired on February 10, 2017, and call you in for tax advice. Both Sam and his wife
Tax return problem
Mr and Mrs Sam Morris retired on February 10, 2017, and call you in for tax advice. Both Sam and his wife Sarah have worked for many years. Sam is 65 years of age and his wife is 63.
Facts:
Dependent child, Age 21
Social Security Benefits, $9,900
Salaries:
Sam (January 1 - February 10) $7,000
Sarah (January 1 - February 10) $5,500
Interest Income:
Port Authority of N.Y. Bonds: $300
Interest from Bank Deposits: $1,400
Corporate Bonds: $900
Highway Bonds of Ohio: $100
Dividend Income:
Microsoft CS: $4,000
General Electric CS: $2,000
AGA Ltd. of England: $1,000
Net Rental Income: $4,000
One of their tenants moved out on July 14, 2017, and Sam determines that they had damaged the stove, and therefore only returned $50 of their $150 deposit.
The Morrises' daughter borrowed $10,000 two years ago to purchase a new automobile. She has made payments to her parents and on September 1, 2017, only $2,500 was still outstanding on the loan.On their daughter's birthday, they told her she no longer had to make payments.
Sam was Vice President of a very large corporation. As part of his fringe benefit package, the corporation purchased for him $50,000 of group-term life insurance. The corporation continues to pay for his life insurance even after retirement.
The Morrises' three children gave ther parents a gala retirement party. Many friends and relatives were invited. Gifts valued at over $1,000 were received by the couple.
In October, Mrs, Morris entered a contest being run by a local bank. She submitted drawings for a bank logo. her drawing was selected and she received $500.
Many years ago, Sam purchased an annuity policy for $9,000. Starting on March 3, 2017, he began receiving lifelong monthly payments of $60.
The Morrises' 21 year old daughter is in college. She worked during the summer and earned $2,500. Interest on her savings accounts amounted to $500. Her parents paid for the college tuition of $4,000.
The Morrises has itemized deductions of $14,000.
Determine the Morrises' taxable income for 2017.
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