# Reduces the 1200 to 0 the itemized deductions total

• Homework Help
• 9
• 83% (6) 5 out of 6 people found this document helpful

This preview shows page 3 - 6 out of 9 pages.

reduces the \$1,200 to \$0. The itemized deductions total \$58,900 (\$10,000 mortgage interest + \$13,000 property tax + \$17,000 contributions + \$15,000 state income tax + \$2,000 medical + \$1,900 casualty).
3
Question 4. 15 pts. Joe, who is in the 33% tax bracket in 2012, expects to retire in 2013 and be in the 25% tax bracket. He plans to donate \$50,000 to his church. Because he will not have the cash available until 2013, Joe donates land (long-term capital gain property) with a basis of \$10,000 and fair market value of \$50,000 to the church in December 2012. He reacquires the land for \$50,000 in February 2013. Discuss Joe’s tax objectives and all tax issues related to his actions. (Show calculations.) not
Question 5. XX pts.? John and Jenny decide to give \$75,000 to two and the spouses of the two sons. a) What is the most tax advantaged way to maximize their annual gift tax exclusion? b) How much is subject to gift tax? (Ignore life time exclusion.) (Show calculations for each part.)
4
Multiple Choice 5 pts each (Mark answers on Scantron form.) Section 179 deduction for 2011 cannot exceed maximum limitation of 500,000. If Section 179 investment exceeds 2 million it is reduced one dollar per dollar exceeding for each dollar of investment over 2 million. Deduction cannot exceed taxpayers taxable income.