AC553_W2_Assignment_Solution

AC553_W2_Assignment_Solution - Week 2 Assignment Solution...

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Week 2 Assignment Solution Rent and Security Deposits 4-25. Billy Dent has the following rental income: (1) Rent received in January 2009, but due in December 2008 $5,000 (2) Rent received in December 2009, not due until January 2010 4,000 Total rental income $9,000 The security deposit is not considered income because it is refundable. Divorce Payments 4-32. Under tax law, property transferred pursuant to a divorce decree does not give rise to income. Therefore, item (a) does not generate income. Item (b) is not treated as alimony. The payments do not end on death. Item (c) generates a tax deduction of $1,500 per month for Arnold and income to Barbara of $1,500 per month. Child support is not tax deductible nor is it included in the gross income of the recipient. Investment Income 5-26. Series EE bonds give the investor the opportunity to recognize the interest income yearly or wait until the bonds mature. Investments in qualifi ed veterans’ bonds and industrial development bonds used for mass transit present other ways of excluding
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This note was uploaded on 02/21/2012 for the course ACCOUNTING 553 taught by Professor James during the Spring '12 term at DeVry Phoenix.

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AC553_W2_Assignment_Solution - Week 2 Assignment Solution...

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