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- LO.6, 8 William, a high school teacher, earns about 50,000 each year. In December 2019, he won 1,000,000 in the state lottery. William plans to donate 100,000 to his church. He has asked you, his tax adviser, whether he should donate the 100,000 in 2019 or 2020. Identify the tax issues related to Williams decision.N4 Samuel invested $10,000 a year into his retirement plan from his before tax earnings (that is, he received a deduction for these contributions and was not taxed on the income). His employer contributed $5,000 a year to Samuel’s retirement fund. After 30 years of contributions, Samuel retires and receives a distribution of $900,000, the balance in his retirement fund. Samuel must include what amount in gross income? Group of answer choices $ 0 $450,000 $600,000 $900,000Q3 Ms. Prince wants to create a scholarship in honor of her parents at the law school from which she received her degree. She could endow the scholarship with $557,500 cash or with $557,500 worth of marketable securities with a cost basis of $334,500. Assume the taxable year is 2021. Required: If her AGI is $3.8 million, compute the after-tax cost of the two endowment options. Use Individual Tax Rate Schedules and Tax rates for capital gains and qualified dividends. (Enter your answers in dollars not in millions of dollars.) After-tax cost: Cash /Securities
- Accounting 1.Jake pays $8,500 in deductible property taxes. His marginal tax rate is 31%, his effective tax rate is 26% and his nominal average tax rate is 28%. What is Jake's tax savings from paying the property tax? 2.Mike and Liz file a joint return in 2021. AGI is 64,000 and they have $27,000 of itemized deductions. Mike and Liz are both 65. What is their taxable income for 2021? a. $35,500 b. $36,200 c. $37,000 d. $38,900 e. None of the answers provided is correct.Assume the couple John and Helen want to fund a college education for their son, William, age 2. William will attend college starting at age of 18. He needs $90,000 available at age 18 for his college expense. The couple feels they can make 6% after-tax return annually in a 529 education fund. How much do they need to deposit today to meet their goal? Assume the couple John and Helen want to fund a college education for their son, William, age 2. William will attend 4 years of college starting at age of 18. He needs $60,000 available at age 18 for his college expense. Starting from now, the couple plans to invest $3000 to the 529 education fund at the end of each year. What rate of annual return do they need to achieve?Marlo and Merlins son, Alex, needs 20,000 to start a business. They have 30,000 in securities that they can use to give him the capital he needs. Pertinent information regarding the securities is given below: Marlo and Merlin are in the 28 percent marginal tax rate bracket; Alex is in the 15 percent marginal tax rate bracket. Neither Marlo, Merlin, nor Alex has any other capital asset transactions during the year. Alexs basis in any of the securities gifted to him will be the lesser of his parents basis or the fair market value of the security. Discuss the tax effects of alternate methods of transferring 20,000 to Alex, and devise an optimal plan for making the transfer.
- Calculating taxes on security transactions. If Julia Diaz is single and in the 24 percent tax bracket, calculate the tax impact of each of the following security transactions. (Use the IRS regulations for capital gains in effect in 2018.) Treat each of the following cases as independent of the others. a. She sold stock for 1,200 that she purchased for 1,000 5 months earlier. b. She sold bonds for 4,000 that she purchased for 3,000 3 years earlier. c. She sold stock for 1,000 that she purchased for 1,500 15 months earlier.LO.3, 4 Jabari Johnson is considering acquiring an automobile at the beginning of 2020 that he will use 100% of the time as a taxi. The purchase price of the automobile is 48,000. Johnson has heard of cost recovery limits on automobiles and wants to know how much of the 48,000 he can deduct in the first year. Write a letter to Jabari in which you present your calculations. Also prepare a memo for the tax files, summarizing your analysis. Johnsons address is 100 Morningside, Clinton, MS 39058.
