Exam_2 - Name Date Time Started Time Ended 1 Assume that...

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Unformatted text preview: Name: Date: . Time Started: . Time Ended: 1. Assume that your good friend Courtney comes to you. She has received an offer from her firm to do a one-year rotation in Spain. Courtney was offered a salary of $245,000 for this rotation, and will be allowed to come back to the United States for 3 holidays a year totaling 38 days of vacation. Courtney estimates that she will spend $28,350 in housing costs during the year. These costs are currently not going to be paid by her employer. Assume that Courtney is a single filer, who can not be claimed as a dependent. In order to assist Courtney in making a decision, she has requested that you complete several tax returns for 2011, one for each possible scenario that she could use during the tax year. As a base for comparison, Courtney tells you that she currently makes $180,000 as salary if she stays in the U.S. Based on past history, you estimate her following deductible expenses as follows: medical expenses of $15,000, state and local income tax figured on Baton Rouge, LA vs. Houston, Tx., IRA contributions of $7,000, interest expense at $3,500, and student loan interest at $4,600. Make a final recommendation to Courtney as to whether she should accept the assignment, how she should file her tax return, and if there are any further negotiations that she might do. Assume her current state income tax rate is 5%, and that her taxable income for state purposes is based on a territorial system. Also assume that next year’s tax rates, income brackets, and rules and regulations will be the same as they are in 2011. Complete a 1040 for both scenarios. Name: 2. Assume that your good friend Courtney comes to you. She has received an offer from her firm to move from Louisiana to Texas. Courtney was offered a salary of $195,000 for this move. Courtney estimates that her housing costs will increase by about $8,000 a year, and that she will incur an additional $4,000 in property taxes per year. Assume that Courtney is a single filer, who can not be claimed as a dependent. In order to assist Courtney in making a decision, she has requested that you complete several tax returns for 2011, one for each possible scenario that she could use during the tax year. for 2011, one for each possible scenario that she could use during the tax year....
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This note was uploaded on 04/05/2012 for the course ACCT 4221 taught by Professor Crumbley,d during the Spring '08 term at LSU.

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Exam_2 - Name Date Time Started Time Ended 1 Assume that...

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