T11F-Chp-04-2-HW-Sol-Excel-2011

T11F-Chp-04-2-HW-Sol-Excel-2011 - Chapter 4 No Ans 1 A 2 A...

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Chapter 4 8d2ba9cad13b1e85862ca51332f29f52f4f4db0f.xls Page 1 of 1 No. Ans. Chapter 4 1 A Receipt of an asset as an inheritance is not included in income of the heir. 2 A Sale of Inherited property Selling Price $9,000 Cost to Pat (decedent) $5,000 FMV at date of death $8,000 $8,000 FMV - 6 months after death $11,000 Executor did not elect alt. valuation date Gain on sale by heir $1,000 3 C Value When Your Selling Your Shares Cost Transferred Basis Price Gain 10,000 $100,000 $250,000 $100,000 10,000 $100,000 $300,000 $300,000 $400,000 $600,000 $200,000 4 B Insurance proceeds - election to receive annuity Face amount of policy $150,000 Total amount to be received $200,000 Exclusion percentage 75% Payment received this year $10,000 Amount excluded - return of capital $7,500 Amount of gross income $2,500 5 A Clide Scholarship income Received Scholarship $3,000 $3,000 Loan $1,500 Spent Tuition $2,000 ($2,000) Books $500 ($500) Room and Board $2,000 Income to be reported $500 6 B Mary- scholarship 7 B Foreign earned income exclusion 12- Month 6-Month Salary $200,000 $100,000 Maximum exclusion $92,900 $46,450 Maximum exclusion is prorated based on actual number of days in foreign country.
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