1. What amount must David, single filing status, is a retired CFO who received $200,000 in pension payments, $20,000 of Social Security benefits, and a $40,000 annual annuity payment. David purchased the 10-year annuity 5 years ago at a cost of $300,000. Determine David's taxable gross income.
2. Anna and Kevin, married filing jointly filing status, have total salaries of $160,000 ($80,000 each) in the current year. This year, Kevin received a $20,000 scholarship to pay his $14,000 tuition and $6,000 housing expenses. Anna paid $2,000 of interest on a qualified education loan to attend New York University and David paid $1,500 of interest on a qualified loan to attend Brown University in the current year. Determine the couple's adjusted gross income for the current year?
3. In the current year, Sarah, age 67 and married foling separately filing status, earned a salary of $120,000 and received $20,000 municipal bond interest. Sarah paid $12,000 in state taxes and $20,000 interest on a mortgage on her home. she purchased her home in 2019 and the average principal balance of the mortgage was $2 million in the current year. Compute Sarah's taxable income for the current year.
4. Hannah, married without dependents, has $200,000 income after all applicable deductions from a qualified trade or business. The business paid W-2 wages for $60,000 and had total unadjusted basis of property of $800,000. Hannah's spouse, Abby, earned a $180,000 salary. The couple also earned $20,000 long-term capital gains, earned $40,000 qualified dividends and has $25,000 itemized deductions. What is the couples qualified business income deductions for the current year?
5. Matthew, age 66 and head of household filling status, earned $80,000 gross income from his sole owner LLC (qualified trade of business taxes as a sole proprietorship), paid self-employment tax of $11,304 and paid self-employment healthcare premiums of $5,000. Matthew also had a $10,000 short-term capital gain, a $20,000 long-term capital loss, and paid $4,000 investment interest expense. Assuming Matthew's personal payments included $3,000 cash contributed to a public charity, $8,000 state taxes, $1,000 auto loan interest, and $9,000 home interest on $300,000 of acquisition debt for the current year, compute his current year taxable income.