Question

Randy and Sharon are married and have two dependent children. Their 2019 tax and other related...

Randy and Sharon are married and have two dependent children. Their 2019 tax and other related information is as follows:

Total salaries

$160,000

Bank account interest income

3,500

Municipal bond interest income

1,500

Value of employer provided medical insurance

12,500

Employer paid premiums for $50,000 of group term life insurance

5,500

Dividend income from ABC stock

2,000

Loan from Randy's parents

5,000

Gift from Randy's parents

15,000

Gain from the sale of qualified small business stock acquired in 2008

18,000

Total itemized deductions

27,000

Compute Randy and Sharon's taxable income. (Show all calculations in good form.)



Compute Randy and Sharon's taxable income. (Show all calculations in good form.)

Homework Answers

Answer #1

Solution:

Particulars $ $
Total Income:
total salaries 160000
Bank account interest income 3500
Dividend income from ABC stock 2000
loan from parents 5000
Gain from the sale of qualified small
business stock acquired in 2008 18000 188500
Total itemized deductions 27000
taxable income 161500

note: Municipal bond interest income, employer provided medical insurance , Employer paid premiums for $50,000 of group term life insurance and Value of Gift from Randy's parents are not taxable.

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