90.2K

Verified Solution

Link Copied!

H, age 45, and W, age 43, are married with a 5-month-old son.H and W always file jointly.H is the vice president of a local bank and is paid a salary of $95,000. W is registered nurse at a large hospital and is paid a salary of $80,000. H is a partner in BC partnership.He is a 50% owner.The partnership hadtotalincome of $50,000 (qualified business income) in 2023 and distributed $5,000 to H in 2023.In addition to the above income, H and W received the following in 2023:

$2,000 qualified cash dividend on ABC, Inc. stock.

$1,200 interest on State of Maryland bonds that H owns

$5,000 on interest from a saving account that H and W own together.

W received a check for $400 from her employer in recognition of her outstanding service to the hospital during the past 10 years.

W and H received $1,800 refund in 2023 on their 2022 state income taxes. Their itemized deductions in 2022 totaled $26,000.

The bank provides H with $90,000 of group term life insurance protection. The bank provides all full-time employees with group term insurance. H has worked for the bank all year. (Under the Uniform Premiums, the cost per $1,000 of protection per month is .15 for a 45-49 year old.)

The bank pays $225 a month for a parking space for H.

W sold his car for $6,000.He paid $5,500 for it 10 months ago.

The hospital provides W with $1,000 for child care all of which she used to pay a nanny to take care of her 5-month-old.

H has access to a gym on his works premises.A gym membership costs $400 a year.

Because W must be available should an emergency arise, she is required to eat her lunches in the hospital cafeteria.The value of the free meals provided by her employer during 2023 was $1,100.

W was injured on the job in 2023 and received workers compensation in the amount of $2,000.

Hs father passed away in February 2023 leaving H a house valued at $300,000. H rented the land to R from March to December 31, 2023 for $800 a month.

Ws father gave her a gift of $20,000 in 2023.

H also received $100,000 in life insurance when his father died.

H purchased an annuity years ago for 10,000.The annuity will pay 2,000 for 6 years.In 2023 H received the first 2,000.

H paid $2,000 in alimony to his ex-wife (divorce 2017) and $4,000 in child support.

H and W paid $7,000 in qualified mortgage interest.

H and W paid $6,000 in real property taxes and $13,000 in state income taxes.

H and W had the following expenses not covered by medical insurance: $19,500

H and W made $19,000 in qualified charitable contributions

(a) What items areexcludedfrom gross income? (list below)_______________

(b) What is H and Wsgross income? (show items in gross income below) :_____________

(c)What is H and Wsadjusted gross income? (show for AGI deductions below):______________

(d) What is H and Wstaxable income?(show from AGI deductions below):_______________________

(e) What is H and Wstax liability? (show work below):_____________________________

Answer & Explanation Solved by verified expert

See Answer