Chapter 3 Fall 11

Chapter 3 Fall 11 - Stewart Tax I - Chapter 3 4 Example for...

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Stewart – Tax I - Chapter 3 1 Annuity Example – Fixed Term George invests $6,000 and will receive $1,000/year for 10 years. What amount is excludable each year from George’s income ? Exclusion ratio? Exclusion each year? Gross Income each year?
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Stewart – Tax I - Chapter 3 2 Annuity Example – Annuity for Life A taxpayer, age 59, invests $24,800 that will pay him $200 per month for life. How much is excludable from & includible in gross income? (Table on page 3-12) Monthly Exclusion? Excluded per year? Gross income/year? What if TP lives longer than 310 months? What if TP lives only 200 months?
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Stewart – Tax I - Chapter 3 3 Modified AGI Example A single taxpayer received $3,000 in Social Security payments & $2,000 of tax exempt interest. Her AGI without the SS is $30,000. Modified AGI? Tier One Example What is the taxable portion of her $3,000 Social Security income? Lesser of: ½ SSI ½ (Mod AGI – Base Amount)
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Unformatted text preview: Stewart Tax I - Chapter 3 4 Example for Tier Two If a single taxpayer receives Social Security of $12,000 and has AGI of $50,000 before SSI: Modified AGI? Taxable SSI? Lessor of 1 or 2 1. 85% SSI 2. A + B A. 85% Mod AGI Base Amt B. Lesser of (1) or (2) (1) Tier 1 inclusion amount (1/2 SSI) (2) $4.5K unmarried or $6K MFJ Stewart Tax I - Chapter 3 5 Alimony VS Child Support Example Which is better to receive - $7,500 of child support or $9,000 of alimony if MTR is: 15% MTR ATB (After Tax Benefit) C Support: Alimony: 30%MTR (ATB) C Support: Alimony: Stewart Tax I - Chapter 3 6 Installment Sale Example L sells investment land w/ $20,000 basis in 2008 for $50,000 w/ payment to be received as follows: $10,000 in 2008 & $20,000 in 2009 & 2010. How much income is reported in 2008, 09 & 10? Gross profit = Gross profit % = 08 income? 09 & 10 Income? What election could be made? Why?...
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Chapter 3 Fall 11 - Stewart Tax I - Chapter 3 4 Example for...

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