Question

75. Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he Page 5-45 is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer. Determine Ken's gross income and complete page 2 of Form 1040 (through line 6) and Schedule 1 for Ken. a) Ken won $1,200 in an illegal game of poker (the game was played in Utah, where gambling is illegal). b) Ken sold 1,000 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share. c) Ken received $25,000 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $210,000. d) Ken received $13,000 in disability benefits for the year. He purchased the disability insurance policy last year. e) Ken decided to go back to school to learn about European history. He received a $500 cash scholarship to attend. He used $300 to pay for his books and tuition, and he applied the rest toward his new car payment. 1) Ken's son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike to Ken. Ken received the check on December 30 in the amount of $1,100. g) Ken received a $610 refund of the $3,600 in state income taxes his employer withheld from his pay last year. Ken claimed $12,050 in itemized deductions last year (the standard deduction for a single filer was $12,000). h) Ken received $30,000 of interest from corporate bonds and money market accounts.

Answer 1

R page! ice GOOSS total income is the total income earned by the Individual without considering deductions Computation of Gross total income:- Cin $ 1 www www me Particulars Amount 18 Calplanation 1,200 source of income is whether regalog legal Shall be taxable (2) Gains on transfer of shares 1,000 | 1000 X (32-30) (1) Iillegal Jocome by playing Poker game Eshools) (3) Anouity Income -124,500 =125,000-00,10100037 20 Disability Benefit (5) scholarship income 200 it is excluded while computing the income as policy purchased by Tax Payer. nel Benefit after meeting boolc Expenditur is taxable and courpay 6b Jo come Tar Refund- See note 1) 50 mentis dou not Quality deduction Alfand Received also taxable interest income is included in cross locome! 3D joterest income 30.000 GOSS Total Income 46,950

Ac page-2 * Nale- Itemized deduction of $ 610 over payment Standard deduction $ 12,050 $12,000 "Tax Benefit from prior yecon $ 50 C please upvote it meaos a lot to me? Thanking you ☺