Besides the items already mentioned, the Clarks have the following receipts for 2017:
Social Security benefits (Andy, $12,000; Sarah, $6,000) $18,000
Consulting income paid by Pelican (including expense reimbursement of $11,150) 35,000
Life insurance proceeds (see below) 50,000
Qualified dividend income (reported on separate Forms 1099–DIV):
Ragusa Corporation 1,200
Pelican Power 400
Interest income (reported on separate Forms 1099–INT):
IBM bonds 600
CD at First National Bank of McKinney 400
Wells Fargo money market fund 300
City of Beaumont (TX) general purpose bonds 9,000
The life insurance proceeds concerned a policy owned by Maximilian Clark , which named Andy as sole beneficiary. The receipt of the proceeds came as a complete surprise to Andy as he never knew the policy existed.
Requirement: From the data above make necessary assumptions for information not given in the problem but needed to complete the return.
Sources of income:
Consulting income - 35000
Dividend income from multiple sources - 1600
Interest income - 10300
Life insurance proceeds - 50000
Social security benefits - 18000
Total = 114900
Deductible expenses:
Life insurance proceeds - 50000
Social security benefits - 18000
Reimbursements - 11150
Total = 79150
Taxable income = 35750
Besides the items already mentioned, the Clarks have the following receipts for 2017: Social Security benefits...
Note: This problem is for the 2019 tax year.David R. and Ella M. Cole (ages 39 and 38, respectively) are husband and wife who live at 1820 Elk Avenue, Denver, CO 80202. David is a self-employed consultant specializing in retail management, and Ella is a dental hygienist for a chain of dental clinics.David earned consulting fees of $145,000 in 2019. He maintains his own office and pays for all business expenses. The Coles are adequately covered by the medical plan...