Question

• Phil, 35 years old is an accountant. He receives medical insurance and fringe benefits from the employee. His wife, Sharon is 33 years old and works part time as office manager. They have 1 child, Amy 4 years old (qualifies for the $2,000 child care credit. They live in NYC and Sharon’s mother cares for Amy at no cost.  

Phil’s Gross salary	$56,400
Sharon’s salary	$22,000
Cash gift	$5,000
Interest Income from bank acc	$100
Federal income tax w/h	$2,500
State income tax	$3,680
Charitable contributions	$6,000
Rent paid	$10,000
Made a loan on March 1 in current year to a friend, who was starting a business.  Principal amount was $10,000 pays interest annually on December 31. The interest rate is 5%.	Calculate amount	(Loan was done as part of arm’s length transaction. Interest was paid on time)
Purchased 100 shares of IBM for $2,000 in April of this year and sold the stock for December for $1,500	Calculate amount
Municipal Bond Interest	$500
Purchased 100 shares of Disney for $5,000 and sold it for $1,000.  Held the stock for 2 years	Calculate amount

Calculate Phil and Sharon's tax liability before applying any credits or tax payments?

Answer 1

solution

Assessable salary figuring - Married couples together

Net Income

Pay from pay (phil's and Sharon's) 56400+22000= 78400

standard conclusion (16050) 62350

Capital addition

Transient capital misfortune 500 (can't set off against some other heads)

Long haul capital increase 4000 (can't set off against some other heads)

Pay from other source

premium pay from bank 100

money blessing 5000

enthusiasm from credit 417

metropolitan bond intrigue 500

all out pay from other source 6017

all out salary after standard conclusions 68367

less close to home exclusion

civil intrigue bond 500

altruistic commitment 6000 (6500)

Assessable Income is 61867

answered by: anonymous