Question

• Phil, 35 years old is an accountant. He receives medical insurance and fringe benefits from the employee. His wife, Sharon is 33 years old and works part time as office manager. They have 1 child, Amy 4 years old (qualifies for the $2,000 child care credit. They live in NYC and Sharon's mother cares for Amy at no cost. Phil's Gross salary 556,400 Sharon's salary 522,000 Cash gift $5,000 Interest Income from bank acc $100 Federal income tax w/h . $2,500 State income tax $3,680 Charitable contributions $6,000 Rent paid $10,000 Made a loan on March 1 in current year to a Calculate (Loan was done as part of arm's friend, who was starting a business. amount length transaction and interest Principal amount was $10,000 and interest is was paid on time) due on December 31 annually. Interest rate is 5%. Purchased 100 shares of IBM for $2,000 in Calculate April of this year and sold the stock for amount December for $1,500 $500 Municipal Bond Interest Purchased 100 shares of Disney for $5,000 Calculate and sold it for $1,000. Held the stock for 2 amount years Calculate Phil and Sharon's taxable income?

Answer 1

Answer :

Taxable income calculation - Married couple together

Gross income

Income from salary (Phil's and Sharon's) 56400 + 22000 = 78400

Standard deduction (16050) 62350

Capital gain

Short term capital loss 500 (can't set off gainst any other heads)

Long term capital gain 4000(can't set off against any other heads)

Income from other source

Interest income from bank 100

Cash gift 5000

Interest from loan 417

Municipal bond interest 500

Total income from other source 6017

Total income after standard deductions 68367

Less : Personal exemption

Municipal interest bond 500

Charitable contribution 6000 (6500)

Taxable income 61867