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ECON138A_HW#3

# ECON138A_HW#3 - 3,100 AGI 206,200 New AGI 203,200 b Long...

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Trevor Salas 11/9/11 #3255593 Homework #3 CHAPTER 15 18. a. The after-tax cost is 0. She was completely reimbursed so she won’t report the reimbursement as income and she won’t deduct the expense. b. She doesn’t itemize her deductions so there is no tax effect. This gives her after-tax cost of 1,119. c. 2%* 70,150=1,403. Since her AGI exceeds her employment-related expenses(619+500=1,119), she can not deduct any of them. Therefore, her after-tax cost is 1,119 d. 2% * 25,300=506. Since her employment-related expenses(1,119) exceed 2% of AGI, she can deduct 1,119-506=613. So, her after-tax cost= 1,119-.15(613)= 1,027.05 CHAPTER 16 21. a) Short Term Gain 8,900 Long Term Loss 15,000 Net Long Term Cap Loss 6,100 Deductible Loss 3,000 Long Term Loss Carry Forward

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Unformatted text preview: 3,100 AGI 206,200 New AGI 203,200 b) Long Term Gain 2,100 Long Term Loss 1,720 Net Long Term Cap Gain 380 15% tax 57 Gain Net of Tax 323 AGI 206,200 New AGI 206,580 c) Long Term Loss 5,000 Short Term Loss 4,800 Total Capital Loss 9,800 Deductible Loss 3,000 Short Term Loss Carry Forward 1,800 Long Term Loss Carry Forward 5,000 AGI 206,200 New AGI 203,200 d) Short Term Loss 5,600 Long Term Gain 1,500 Net Short Term Cap Loss 4,100 Deductible Loss 3,000 Short Term Loss Carry Forward 1,100 AGI 206,200 New AGI 203,200 28. a) Ms. Reid can deduct the \$1,100 dividend received. b) Ms. Reid can deduct the \$690 interest on her certificate. c) Ms. Reid can deduct her investment expense of \$3,900....
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