Answer To: ACCT130 – Portfolio Project 7 Problem 1 Carl Baker is a 63-year-old widower. He had income for 202X...
Tanmoy answered on Apr 14 2022
ACCT130 – Portfolio Project 4
ACCT130 – PORTFOLIO PROJECT
Table of Contents
Problem 1 3
Problem 2 8
References 12
Problem 1
Gross Income
Pension
$39,850
Interest Income
$5,500
Dividend Income
$2,000
Annuity Income
$3,240
Social Security Benefits
$11,900
Imputed interest on gift loan
$1,600
Net Rental Income
$1,750
Gross Income
$65,840
Deduction for AGI
$0
AGI
$65,840
Less: Personal exemption deduction
-$3,950
Less: Itemized deductions
-$13,000
Taxable Income
$48,890
Tax Liability
$6,676
Less: Estimated Tax Payments
-$5,900
Net tax payable (or refund due) for 202X
$776
Cost of Annuity
$46,800
Monthly Payments
$450
Number of Monthly Payments
260
Exclusion percentage of annuity contract Carl Purchased = Cost of Annuity/ (monthly payments x number of payments); $46,800/ ($450 x 260)
40.00%
Annual Exclusion on annuity contract:
Annuity received from group insurance
$5,400
Annual Exclusion on annuity contract = annuity received x Exclusion percentage; $5400 x 40%
$2,160
Annuity payment included in gross income = Annuity received - Annual exclusion: $5,400 - $2,160
$3,240
Amount of the Social Security benefits that include in gross income is the lesser of the two following amounts
a. 85% x $14,000
$11,900
Imputed interest on gift loan: Carl made below market loan of amount $60,000 to her daughter qualifies for $100,000 loan exception, earned net income of $1500 from investment must include in Carl's gross income instead of $60,000 x 6% (federal tax rate) =
$3600
Net rental income from the townhouse =
Rent income
$9,000
Less: Expenses
Utilities
$2,800
Maintenance
$1,000
Real estate taxes
$750
Insurance
$700
Depreciation
$2,000
-$7,250
Net rent income
$1,750
Carl does not qualify for a dependency deduction as her daughter is independent.
Carl's itemized deductions
Personal property...