Michaela owns a principal residence in Georgia, a townhouse in San Francisco, and a yacht in Cape Cod. All of the properties have mortgages on which Michaela pays interest. a. For which residences can Michaela deduct mortgage interest? b. What are the limitations on Michaela's mortgage interest deduction? What strategy should Michaela consider to maximize her mortgage interest deduction? Michaela's deduction is limited to interest on acquisition indebtedness up to s If the debt existed at December 15,2017 or if incurred after that date. Therefore, she should choose the second residence that will result in the interest deduction. Tabitha sells real estate on March 2 of the current year for $356,800. The buyer, Ramona, pays the real estate taxes of $17,840 for the calendar year, which is the real estate property tax year. Round any division to four decimal places and use in subsequent calculations. Round your final answers to the nearest dollar. Assume a 365-day year. a. Determine the real estate taxes apportioned to and deductible by the seller, Tabitha, and the amount of taxes deductible by Ramona. Tabitha: 5 Ramona: 1 b. Calculate Ramona's basis in the property and the amount realized by Tabitha from the sale. Tabitha: 5 Ramona: 1 Miller owns a personal residence with a fair market value of $249,950 and an outstanding first mortgage of $199,960, which was used entirely to acquire the residence. This year, Miller gets a home equity loan of $12,498 to purchase a new fishing boat. How much of this mortgage debt is treated as qualified residence indebtedness? Donna donates stock in Chipper Corporation to the American Red Cross on September 10, 2021. She purchased the stock for $21,350 on December 28,2020 , and it had a fair market value of $30,500 when she made the donation. a. What is Donna's charitable contribution deduction? The stock is treated as property and Donna's charitable contribution deduction is $ for tax purposes. b. Assume instead that the stock had a fair market value of $18,300 (rather than $30,500 ) when it was donated to the American Red Cross. What is Donna's charitable contribution deduction? The Wilmoths plan to purchase a house but want to determine the after-tax cost of financing its purchase. Given their projected taxable. income, the Wilmoths are in the 24% Federal income tax bracket and the 8% state income tax bracket (i.e., an aggregate marginal tax bracket of 32% ). Assume that the Wilmoths will benefit from itemizing their deductions for both Federal and state purposes. The total cash outlay during the first year of ownership will be $30,800 ( $3,080 principal payments, $27,720 qualified residence interest payments). If required, round your interim calculation to nearest dollar. As a result, the inital year after-tax cost of financing the purchase of the home will be s Liz had AGl of $130,000 in 2021 . She donated Bluebird Corporation stock with a basis of $10,000 to a qualified charitable organization on July 5, 2021. a. What is the amount of Liz's deduction assuming that she purchased the stock on December 3, 2020, and the stock had a fair market value of $17,000 when she made the donation? b. Assume that she purchased the stock on July 1, 2018, and the stock had a fair market value of $17,000 when she made the donation. What is Liz's deduction? c. Assume that she purchased the stock on December 3, 2020, and the stock had a fair market value of $7,500 when she made the donation to the charity. What is Li's deduction? Kamon had AGI of $145,000 in 2022. He is considering making a charitable contribution this year to the American Heart Association, a qualified charitable organization. Determine the current allowable charitable contribution deduction in each of the following independent situations, and indicate the treatment for any amount that is not deductible currently. Identify any planning ideas to minimize Ramon's tax liability. a. A cash gift of $72,500. In the current year, Ramon may deduct 1 since his charitable contribution is limited to 1 b. A gift of OakCo stock worth $72,500 on the contribution date. Ramon had acquired the stock as an investment two years ago at a cost of $65,250. The stock's value for determining the contribution is The deduction for 2022 is 3 The remaining c. A gift of a painting worth $72,500 that Ramon purchased three years ago for $65,250. The charity has indicated that it would sell the painting to generate cash to fund medical research. The contribution is valued at 9 The amount deductible in the current year is $ d. Ramon has decided to make a cash gift to the American Heart Association of $101,500. However, he is considering delaying his gift until the following year when his AGI will increase to 5300,000 and he will be in the 32% income tax bracket, an increase from his 2022 incomle tax bracket of 24%. Assume a 6% discount rate. The present value factors, at a 6% discount rate, are as follows: If required, round your final answers to the nearest dollar. Ramon asks you to determine the tax savings from the tax deduction in present value terms if he were to make the gift this year, rather: than delay the gift until next year. Total present value of tax savings from the tax deduction if made this year: 1 Total present value of tax savings trom the tax deduction if made next year: 4 Linda, who files as a single taxpayer, had AGI of $280,000 for 2021. She incurred the following expenses and losses during the year