Question

Question 49 of 50. Ral received Form 1099-C reporting canceled credit debt of 59.000 is total m ediately tore the cancellation were $34,000. The FMV of assets immediately before the cancellation were $20.000. The canceled debt Ral will report on his return is O O O $28.000 $9,000 $6.000 $3,000 Mark for follow up Question 50 of 50.7 Vanida and her husband, Rai, have taxable income of $37.269 before calculating the taxable portion of Vanida's social security benefits. What is the taxable portion of Vanida's social security benefits of $13,719 so 6,270 O $6.110 O $6,860 O $13,719 Mark for follow up << Back Save / Return Later Summary 37,269

Answer 1

Rai total immediately before the cancellation = 34000 FMV of Rai total assets immediately before cancellation=28000 Rai received Form-c reporting cancelled credit card of $9000 The difference between two cancellations = 34000-28000 = 6000 Therefore, Rai must report $3000(9000-3000) of cancelled debt as an addition to his income on his return So the answer is option D (3000)

According to the IRS, the taxable portion of social security benefits that is to be included in the taxable portion is, Up to 50% if combined income is between 32000 and 44000. The taxable income for this couple is 37269. (13719*50%=6859.5) Option C (6860) is the correct answer.