taxes

tax.xlsx

PR 4-1

Susan's salary is $44,000 and she received dividends of $600. She received a K-1 (Partner’s Share of Income, Deductions, Credits, etc.) from SJ Partnership indicating that her share of the partnership's income was $4,000. The partnership distributed $1,000 to her during the year and $600 after year-end. She won $2,000 in the state lottery and spend $50 on lottery tickets. Which amounts are taxable?
Required:
Identify the amounts that are taxable by placing an "X" in the column titled "Taxable"
				Solutions
			Taxable
	Salary	$ 44,000
	Dividends	600
	Partnership Income	4,000
	Partnership Distribution before Year-end	1,000
	Partnership Distribution after Year-end	600
	Gambling Winnings (Lottery)	2,000
	Purchases of Lottery Tickets	50

Bob is a single individual and received a salary of $27,000 before he retired in October. After he retired, he received Social Security benefits of $3,000 during the year.
Required:
1. Show the calculation of provisional income.
2. Show the calculation of the taxable portion of Social Security benefits.	Solutions
a. What amount, if any, of the Social Security benefits are taxable for the year?	a.	Provisional Income Calculation (Taxable Social Security Benefits)
				- 0
				- 0
				- 0
				$ - 0
			$ - 0
			$ - 0
			- 0
			$ - 0
			$ - 0
b. What amount, if any, of the Social Security benefits would be taxable if Bob also has $1,000 of tax exempt interest?	b.	Provisional Income Calculation (Taxable Social Security Benefits)
				- 0
				- 0
				$ - 0
			$ - 0
			$ - 0
			- 0
			$ - 0
			$ - 0
c. What amount, if any, of the Social Security benefits would be taxable if Bob's tax exempt interest was increased to $10,000?	c.	Provisional Income Calculation (Taxable Social Security Benefits)
				- 0
				- 0
				$ - 0
			$ - 0
			$ - 0
			- 0
			$ - 0
			- 0
			$ - 0
			$ - 0

Which of the following constitutes constructive receipt in the current year ended December 31?
								Solution
a. A salary check received at 6:00 p.m. on December 31, after all banks have closed.
b. A rent check received on December 30 by the manager of an apartment complex. The manager normally collects the rent for the owner. The owner was out of town.
c. A paycheck received on December 29 that was not honored by the bank because the employer's account did not have sufficient funds.
d. A check received on December 30. The check was post dated January 2 of the following year.
e. A check received on January 2. The check had been mailed on December 30.

Provisional Income Calculation (Taxable Social Security Benefits)
Adjusted Gross Income (AGI) less Social Security Benefits				$ - 0
Add:				- 0
Tax-exempt interest				- 0
Excluded foreign income
50% of Social Security Benefits
Provisional income				- 0