Question

Tax Treatments: Scroll down to complete all parts of this task. Louis and Sandy Roman were...

Tax Treatments:
Scroll down to complete all parts of this task.
Louis and Sandy Roman were married with two children, Eddie, age 13, and Nancy, age 20. On July 7 of the current year, Louis died.
Nancy is a full- me student at the state university. The Romans own their home and live in Denver. Louis had been disabled for two
years. Sandy is an insurance adjuster and sings in her church choir. In the table below, indicate the appropriate filing status for
Sandy for the current year and whether each item of income listed should be included in or excluded from gross income for the
current year. Click on the associated cell and select the appropriate response from the op ons provided.


For items 1 through 11, indicate which items you would include in gross income or exclude from gross income.

1. Sandy received a payment of $60,000 as the beneficiary of her father’s life insurance
policy.
2. In 2020, the State of California issued an income tax refund of $900 for 2019. Louis and
Sandy did not itemize for last year but will itemize in 2020.
3. Louis received a $650 dividend from a mutual fund that listed its source as 100% various
European companies.
4. Sandy received a $450 dividend from stock she owned in joint tenancy with Louis.
5. Louis sold 20 shares of common stock at a gain of $4,000.
6. Sandy won a raffle and collected $2,000 in cash.
7. Sandy received $200 for serving as a juror in a state court proceeding.
8. Sandy received $50 cash for singing at a wedding.
9. Before he died, Louis received a damage award in a lawsuit of $100,000 for personal
physical injury damages.

10. Louis’ award in the lawsuit also included payment of Louis’ medical expenses of $50,000.
11. Louis received $10,000 from an accident insurance policy for which he had paid all the
premiums.

Homework Answers

Answer #1
Filing Status for Sandy for current Year

Married filing Jointly

As spouse died during tax year

No Income Item - Included / Excluded From Income
1 Sandy Received A Payment Of $60,000 As The Beneficiary Of Louis’ Life Insurance Policy Specifically excluded from Income
2 During The Year The State Of California Issued An Income Tax Refund Of $900 That Related To The Prior Year (A Year In Which Louis And Sandy Did Not Itemize Deductions) Excluded from Income as in previous year they did not itemize deductions
3 Louis Received A $650 Dividend From A Mutual Fund That Listed Its Source As 100% Various European Companies Included in Gross Income
4 Sandy Received A $450 Dividend From Stock She Owned Jointly With Louis Included in Gross Income
5 Louis Sold 20 Shares Of Common Stock At A Gain Of $4,000 Included in Gross Income
6 Sandy Received $50 Cash For Singing At A Wedding Included in Gross Income
7 Before He Died, Louis Received A Damage Award In A Lawsuit Of $100,000 For Personal Physical Injury Damages Specifically excluded from Income
8 Louis’ Award In The Lawsuit Also Included Payment Of Louis’ Medical Expenses Of $50,000 Specifically excluded from Income
9 Louis Received $10,000 From An Accident Insurance Policy For Which He Had Paid All The Premiums Specifically excluded from Income
10 Sand Won A Raffle And Collected $2,000 In Cash Included in Gross Income
11 Sandy Received $200 For Serving As A Juror In A State Court Proceeding Included in Gross Income
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