Mr. Tolen made the following interest payments. Assume the taxable year is 2022.Required:Determine the extent to which he can deduct each payment on his Form 1040.a. $4,600 on credit card debt.b. $14,100 on a $210,000 mortgage secured by his vacation home in Key West. Mr. Tolen incurred the mortgage to purchase thissecond home.c. $1,300 on a $22,000 unsecured loan from a credit union. Mr. Tolen used the loan proceeds to add a boat dock to his Key Westhome.d. $3,700 on a $100,000 unsecured loan from his mother-in-law. Mr. Tolen used the loan proceeds as working capital for his businessas an independent insurance agent.e. $2,400 on a $50,000 loan from a bank. Mr. Tolen used the loan proceeds to purchase an interest in Farlee Limited Partnership,which is his only investment asset. This year, Mr. Tolen was allocated a $790 ordinary loss from the partnership.f. $800 in a $35,000 loan from a car dealership that financed the purchase of Mr. Tolen's new family automobile.Note: For all requirements, leave no cells blank - be sure to enter "0" wherever required.a. Deductionb. Deductionc. Deductiond. Deductione. Deductionf. DeductionX Answer is not complete.Amount$ 4,600 X$ 14,100$1,300 X$ 3,700✔

Mr. Tolan has made various Payments in the year 2022, To check which are deductible and which are…

Answered: Determine the extent to which he can…

SWFT Individual Income Taxes

43rd Edition

ISBN:9780357391365

Author:YOUNG

Publisher:YOUNG

Chapter4: Gross Income: Concepts And Inclusions

Section: Chapter Questions

Problem 37P

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Marlene, a cash basis taxpayer, invests in Series EE U.S. government savings bonds and bank certificates of deposit (CDs). Determine the tax consequences of the following on her 2019 gross income: a. On September 30, 2019, she cashed in Series EE bonds for 10,000. She purchased the bonds in 2009 for 7,090. The yield to maturity on the bonds was 3.5%. b. On July 1, 2018, she purchased a CD for 10,000. The CD matures on June 30, 2020, and will pay 10,816, thus yielding a 4% annual return. c. On July 1, 2019, she purchased a CD for 10,000. The maturity date on the CD was June 30, 2020, when Marlene would receive 10,300.
On January 1, 2019, Kunto, a cash basis taxpayer, pays 46,228 for a 24-month certificate. The certificate is priced to yield 4% (the effective interest rate) with interest compounded annually. No interest is paid until maturity, when Kunto receives 50,000. In your computations: a. Compute Kuntos gross income from the certificate for 2019. b. Compute Kuntos gross income from the certificate for 2020. Round any amounts to the nearest dollar.
In the current year, Sanchez paid interest of $30,000 on a $1,000,000 principal home mortgage. He also paid interest of $4,000 on a $100,000 home equity loan, the proceeds of which he used to pay off student loans. Assuming that he can itemize, what is his current year deduction from these payments? $22,500 $25,000 $30,000 $34,000
On July 1, 2020, Maria made a $90,000 interest-free loan to her son, Daniel, who used the money to retire a mortgage on his personal residence and to buy a certificate of deposit. Daniel’s only income for the year is his salary of $35,000 and $1,400 interest income on the certificate of deposit. Assume the relevant Federal interest rate is 8% compounded semiannually. Required: Determine the effect of the loan on Maria’s gross income for 2020.
This year (2022), Teresa purchased a personal residence at a cost of $950,000. She borrowed $800,000 secured by the home to make the purchase. This year, she paid interest expense on this mortgage of $40,000. How much mortgage interest may she deduct as an itemized deduction?
Robin's financial records from 2020 show the following information from the forms she received: Interest income from bank CD's: $1,600 Taxable annuity payment total: $3,200 City ad valorem property on investments: $240 Investment interest expense: $5,600 Calculate Robin's net investment income and her current investment deduction. How is a deduction for any potential excess investment interest treated? Why is it treated this way?
Tyrone and Akira, who are married, incurred and paid the following amounts of interest during 2021 Home acquisition debt interest Credit card interest Home equity loan interest (used for home improvement) Investment interest expense Mortgage insurance premiums (PMI) Required: $ 11,250 3,500 5,525 9,000 1,000 With 2021 net investment income of $1,125, calculate the amount of their allowable deduction for investment interest expense and their total deduction for allowable interest. Home acquisition principal and the home equity loan principal combined are less than $750,000. Deduction for investment interest expense Total deduction for allowable interest Amounts
Tyrone and Akira, who are married, incurred and paid the following amounts of interest during 2021: Home acquisition debt interest Credit card interest Home equity loan interest (used for home improvement) Investment interest expense Mortgage insurance premiums (PMI) Required: $ 13,250 4,300 6,365 10,600 1,000 With 2021 net investment income of $1,325, calculate the amount of their allowable deduction for investment interest expense and their total deduction for allowable interest. Home acquisition principal and the home equity loan principal combined are less than $750,000. Amounts Deduction for investment interest expense Total deduction for allowable interest $ 1,325 $ 20,940
During 2020, Suki rented her vacation home for 90 days and lived in the home for 60 days. The vacation home is classified as personal/rental use. Suki's gross rent revenue is $25,000. For the entire year, the vacation home incurred the following expenses: C6 Ex38 Real estate taxes Mortgage interest expense Utilities & maintenance Depreciation $6,200 $12,000 $4,500 $6,500 Using the IRS approach: A) Calculate and list the expenses directly attributable to Suki's rental income (for AGI). B) Calculate Suki's gain (loss) from the vacation rental activity, reportable on 1040, Schedule E. C) Calculate and list any remaining and available itemized deductions from AGI, reportable on Suki's 1040, Schedule A.
Helen paid the following amounts of interest during the 2019 tax year: Mortgage interest on Dallas residence (loan balance $50,000) $1,600 Automobile loan interest (personal use only) 440 Mortgage interest on Vail residence (loan balance $50,000) 3,100 Visa and Mastercard interest 165 Calculate the amount of Helen's itemized deduction for interest (after limitations) for 2019.
Greg Grove pays $50,000 interest in 2020 on his mortgage on his principal residence. It has an interest rate of 4 percent and balance of $1,250,000 during the year. He took out the mortgage in 2019. How much of this interest is deductible on Greg’s tax return for 2020? show your work
Greg Grove pays $50,000 interest in 2020 on his mortgage on his principal residence. It has an interest rate of 4 percent and balance of $1,250,000 during the year. He took out the mortgage in 2019. How much of this interest is deductible on Greg’s tax return for 2020?

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