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.)
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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