Tam attended Brown University during 2017-2021. She lived at home and was claimed by her parents as adependent during her entire education. She incurred education expenses of $18,000 during college, of which$2,160 was paid for by scholarships. To finance her education, she borrowed $11,000 through a federalstudent loan program and borrowed another $7,000 from a local lending institution for educational purposes.After graduation, she married and moved with her spouse to a distant city. In 2022, she incurred $1,100 ofinterest on the federal loans and $700 on the lending institution loan. She filed a joint return with her spouseshowing modified AGI of $118,000.Required:What amount of student loan interest can Tam and her spouse deduct in 2022, if any?

The purpose of allowing deductible loan interest is to provide individuals and taxpayers with a tax…

Answered: Tam attended Brown University during…

SWFT Essntl Tax Individ/Bus Entities 2020

23rd Edition

ISBN:9780357391266

Author:Nellen

Publisher:Nellen

Chapter17: Business Tax Credits And The Alternative Minimum Tax

Section: Chapter Questions

Problem 28P

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Paul Barrone is a graduate student at State University. His 10-year-old son, Jamie, lives with him, and Paul is Jamies sole support. Pauls wife died in 2018, and Paul has not remarried. Paul received 320,000 of life insurance proceeds (related to his wifes death) in early 2019 and immediately invested the entire amount as shown below. Paul had 42,000 of taxable graduate assistant earnings from State University and received a 10,000 scholarship. He used 8,000 of the scholarship to pay his tuition and fees for the year and 2,000 for Jamies day care. Jamie attended Little Kids Daycare Center, a state-certified child care facility. Paul received a statement related to the Green bonds saying that there was 45 of original issue discount amortization during 2019. Paul maintains the receipts for the sales taxes he paid of 735. Paul lives at 1610 Cherry Lane, Bradenton, FL 34212, and his Social Security number is 111-11-1111. Jamies Social Security number is 123-45-6789. The university withheld 2,000 of Federal income tax from Pauls salary. Paul is not itemizing his deductions. Part 1Tax Computation Compute Pauls lowest tax liability for 2019. Part 2Tax Planning Paul is concerned because the Green bonds were worth only 18,000 at the end of 2019, 5,000 less than he paid for them. He is an inexperienced investor and wants to know if this 5,000 is deductible. The bonds had original issue discount of 2,000 when he purchased them, and he is curious about how that affects his investment in the bonds. The bonds had 20 years left to maturity when he purchased them. Draft a brief letter to Paul explaining how to handle these items. Also prepare a memo for Pauls tax file.
Nadia died in 2018 and is survived by her husband, Jerold (age 44); her married son, Travis (age 22); and her daughter-in-law, Macy (age 18). Jerold is the executor of his wifes estate. He maintains the household where he, Travis, and Macy live and furnishes all of their support. During 2018 and 2019, Travis is a full-time student, and Macy earns 7,000 each year from a part-time job. Travis and Macy do not file jointly during either year. What is Jerolds filing status for 2018 and 2019 if all parties reside in: a. Idaho (a community property state)? b. Kansas (a common law state)?
Tam attended Brown University during 2017-2021. She lived at home and was claimed by her parents as a dependent during her entire education. She incurred education expenses of $10,000 during college, of which $2,000 was paid for by scholarships. To finance her education, she borrowed $6,000 through a federal student loan program and borrowed another $4,000 from a local lending institution for educational purposes. After graduation, she married and moved with her spouse to a distant city. In 2022, she incurred $600 of interest on the federal loans and $400 on the lending institution loan. She filed a joint return with her spouse showing modified AGI of $138,000. Required: What amount of student loan interest can Tam and her spouse deduct in 2022, if any?
Tam attended Brown University during 2016–2020. She lived at home and was claimed by her parents as a dependent during her entire education. She incurred education expenses of $20,000 during college, of which $3,200 was paid for by scholarships. To finance her education, she borrowed $12,000 through a federal student loan program and borrowed another $8,000 from a local lending institution for educational purposes. After graduation, she married and moved with her spouse to a distant city. In 2021, she incurred $1,200 of interest on the federal loans and $800 on the lending institution loan. She filed a joint return with her spouse showing modified AGI of $121,000. Required: What amount of student loan interest can Tam and her spouse deduct in 2021, if any? Tam's allowed deduction
Tam attended Browns University during 2016-2020. She lived at home and was claimed by her parents as a dependent during her entire education. She incurred education expenses of $10,000 during college, of which $2.000 was paid for by scholarships. To finance her education, she borrowed $6,000 through a federal student loan program and borrowed another $4,000 from a local lending institution for educational purposes. After graduation, she married and moved with her spouse to a distant city. In 2021, she incurred $600 of interest on the federal loans and $400 on the lending institution loan. She filed a joint return with her spouse showing modified AGI of $132.000 Required: What amount of student loan interest can Tam and her spouse deduct in 2021, if any? Tam's allowed deduction
The Samsons are trying to determine whether they can claim their 22-year-old adopted son, Jason, as a dependent. Jason is currently a full-time student at an out-of-state university. Jason lived in his parents' home for three months of the year, and he was away at school for the rest of the year. He received $9,500 in scholarships this year for his outstanding academic performance and earned $4,800 of income working a part-time job during the year. The Samsons paid a total of $5,000 to support Jason while he was away at college. Jason used the scholarship, the earnings from the part-time job, and the money from the Samsons as his only sources of support. Assume the original facts except that Jason earned $5,500 while working part-time and used this amount for his support. Can the Samsons claim Jason as their dependent?
Zach attended Champion University during 2014-2018. He lived at home and was claimed by his parents as a deduction during the entire duration of his education. He incurred education expenses of $10,000 during college of which $2,000 was paid for by scholarships. To finance his education, he borrowed $7,000 through a federal student loan program and borrowed another $3,000 from a local lending institution for educational purposes. After graduation, he married and moved with his spouse to a distant city. In 2019, he incurred $700 of interest on the federal loans and $300 on the lending institution loan. He filed a joint return with his spouse showing modified AGI of $128,000. What amount of student loan interest can Zach and his spouse deduct in 2019, if any?
The Samsons are trying to determine whether they can claim their 22-year-old adopted son, Jason, as a dependent. Jason is currently a full-time student at an out-of-state university. Jason lived in his parents' home for three months of the year, and he was away at school for the rest of the year. He received $9,500 in scholarships this year for his outstanding academic performance and earned $4,800 of income working a part-time job during the year. The Samsons paid a total of $5,000 to support Jason while he was away at college. Jason used the scholarship, the earnings from the part-time job, and the money from the Samsons as his only sources of support. Required: Can the Samsons claim Jason as their dependent? Assume the original facts except that Jason's grandparents, not the Samsons, provided Jason with the $5,000 worth of support. Can the Samsons (Jason's parents) claim Jason as their dependent? Assume the original facts except substitute Jason’s grandparents for his parents.…
Alexa owns a condominium near Cocoa Beach in Florida. In 2021, she incurs the following expenses in connection with her condo: Mortgage interest Property taxes $7,925 2,760 Insurance 2,950 TULE Repairs & maintenance 1,875 Utilities 4,400 16,875 Depreciation Ce During the year, Alexa rented out the condo for 100 days and received $23,800 in gross rental receipts. She did not use the condo at all for personal purposes during the year. Alexa's AGI from all sources other than the rental property is $120,000. Alexa has no sources of passive income. (Leave no answer blank. Enter zero if applicable.) What effect does the rental activity have on Alexa's AGI? Alexa makes all decisions with respect to the property. AGI 1.01 increases by decreases by no effect
Jarrod receives a scholarship of $28,000 from East State University to be used to pursue a bachelor's degree. He spends $16,800 on tuition, $1,400 on books and supplies, $5,600 for room and board, and $4,200 for personal expenses. How much may Jarrod exclude from his gross income? $ Carl, age 72, is an officer of Blue Company, which provides him with the following nondiscriminatory fringe benefits in 2023: • Hospitalization insurance premiums for Carl and his dependents. The cost of the coverage for Carl is $3,325 per year, and the additional cost for his dependents is $4,475 per year. The plan has a $3,000 deductible, but his employer contributed $1,500 to Carl's Health Savings Account (HSA). Carl withdrew only $750 from the HSA, and the account earned $55 of interest during the year. • Insurance premiums of $1,050 for salary continuation payments. Under the plan, Carl will receive his regular salary in the event he is unable to work due to illness. Carl collected $4,400 on the policy…

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