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Chapter 3 w Solutions

# Chapter 3 w Solutions - Burkett — Tax 1 Chapter 3 Annuity...

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Unformatted text preview: Burkett — Tax 1 - Chapter 3 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? ‘ifoﬁ /\0\<-s Exclusion each year? \$0 ‘95 “fl-7 34¢; 520 mu... - coQ Gross Income each year? (Zirsrf'f'c‘uiéiégif 6K4 5429A”, :NCOMﬁ ._ a» ’ cg; \ QC? Q “3... 4;,- m: 63:3 ' Burkett — Tax I - Chapter 3 Annuity Example — Annuity for Life A taxpayer, age 5 9, invests \$24,800 that will pay him \$200 per month for life. How much is excludable from & includible in'gross income? (Table on page 340. Monthly Exclusion? {Fawn-s T‘M’sLF‘E W a a ,. I 4,; ‘ 2%} Q ‘2... @O/Mq --*~'=§:;:~ecfm \$353.9 Aj r Excluded per year? egg: \ 0 , . wk - . . .. Gross income/year? kt en Git. so * ae- “o What if TP lives longer than 310 months? me if: 9mm AFN-LR 3w Mos" a;— G3, What if TP lives only 200 months? gay—:5 “get «.300 Qﬁm wean 1 \ gee mos“- xéeomo :: ( \(o, om / 'EtﬁMm/o Osﬁuiatﬁan/ @333 03 t r i Burkett — Tax I - Chapter 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? Q GT ' go. 003 "v V2. J: '\ ISO? \~ T—LE‘. .‘ EN (’0 M59: 1"0“0 3/2531ch Tier One Example What is the taxable portion of her \$3,000 Social Security income? L19: 5579/1. ® ‘47,. SS5; \SQQ LﬁiSDQI-w " - N- \300 0223‘“ (wt Ms? ﬁnest-22> an.» {2333790 ~='--k "ZS: ova) sci/3'0 Burkett — Tax I - Chapter 3 Example for Tier Two If a single taxpayer receives Social Security of \$12,000 and has AGI of \$50,000 before 881: | Modiﬁed AGI? A a i 5Q 000 “tr. sag CD, 900 azure” war: Taxable SSI? LESSMZ ~ . (9 83" 55¢— 95? ix Y‘me :zf‘ \b,200\ (NOB R60? w \\ 93572 [5&4 emf; ‘— \QLWUO _ / \ 4F Lia/363190.. n “FL \$6": 1\$Goo 0“ “ES 00 2/320; 1» “1300 ’ Burkett — Tax I - Chapter 3 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) . % ‘ijg 3L \ba "—1 “(6’00 wﬁi/L Alimony: / “+1930 00300 i (X 3305?) z; (‘9on Burkett — Tax 1 - Chapter 3 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: ﬂ .— ‘ semi: Vaﬁcé —— 89:33: *. P @‘M’ Q M" 2,0 l”; ":1— OK Gross proﬁt % = r Swag “5.; QD‘SZ 08 income? \o\d % (42 0% w a, K 09 & 10 Income? me; 00 22mg: 3/ (gig D M \Q 1,,»- A Law-f :3; \Zﬂwm _ a? I“ What election could be made? f9 0K...» W mmcluoa ‘30 39*; 0C; GAB/V EN 0‘3 Why? . ‘ (9 T t (3. Abs CAPE-PAL Log? C R’ZJQk/«oklﬁ/Lh 0 C? 3421."? aegth meco QA‘PE..®P— O? :N 053 i Wales?” “‘02 w @431 i m. 6 ...
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