WFT08_CompVol_SM_Ch6 - ACCOUNT 451 651 P 6-34 Gross income Salary income Dividend income 79,000 4,000 3,000 86,000 Deductions for AGI Alimony paid

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ACCOUNT 451 / 651 03/19/07 P 6-34 Gross income: Salary income 79,000 Dividend income 4,000 3,000 86,000 Deductions for AGI: Alimony paid 12,000 Traditional IRA contribution 4,000 Loss on sale of stock 900 16,900 Adjusted gross income 69,100 Itemized deductions: Contributions to First Church 2,900 Real estate taxes on personal residence 1,900 Mortgage interest on personal residence 6,000 State income taxes 3,500 Total itemized deductions 14,300 Taxable Income before PE and DE 54,800 P 6-38 a. Cash method: 500,000 current year 45,000 following year b. Accrual method: 545,000 current year all events test and economic performance test both met Page 1 of 5
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ACCOUNT 451 / 651 03/19/07 P 6-43 Tax Court Vac Home % IRS Vac Home Percentage Days of Personal Use 60 Days of Rental Use 60 60 ÷ 365 60 ÷ 120 Tax Court Method IRS Method Total to Vac. Home to Sch. A to Vac. Home to Sch. A Mort. Int. Paid on V. Home 4,758 782 28,945 2,379 2,379 RE Taxes Paid on V. Home 1,098 180 918 549 549 5,856 963 29,862 2,928 2,928 P 6-48 Revenue 18,000 Property taxes 3,000 subtotal 15,000 Materials and supplies 4,500 Utilities 2,000 Advertising 5,000 Insurance 750 12,250 Income before depreciation 2,750 Depreciation (limited) 2,750 * Net income from hobby 0 * actual depreciation: 4,000 AGI before hobby 42,000 Income from hobby 18,000 AGI 60,000 hobby deductions otherwise deductible 3,000 deductible as bus. exp. (not deprec.) 12,250 depreciation 2,750 total 15,000
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This homework help was uploaded on 02/18/2008 for the course ACCT 426 & 536 taught by Professor Dorocak&mcallister during the Winter '08 term at CSU San Bernardino.

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WFT08_CompVol_SM_Ch6 - ACCOUNT 451 651 P 6-34 Gross income Salary income Dividend income 79,000 4,000 3,000 86,000 Deductions for AGI Alimony paid

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