Betty Brewster received the following interest: 82. Luggage gift for purchasing a four-year certi fi cate of deposit (fair market value) $50 Interest on passbook savings account 15 Interest on certi fi cate of deposit 200 Dividends on share account savings in credit union 150 Interest on State of Mississippi bonds issued to fi nance state highway construction 300 What is the amount of interest income to be included in income? Ron Remy enters into a three-year lease to rent his property. In the fi rst year, in addition to $9,600 for 83. the year’s rent, he received $1,600 in advance as rent for the last two months of the lease and $800 as a security deposit which he plans to return to the tenant at the end of the lease. What amount must be reported as income by Ron? 84. decree: (a.) Alice will transfer title of the family home to Bob. The house has a fair market value of $80,000. (b.) Both children will live with Alice. (c.) Bob will give Alice $2,000 per month for alimony. Also, he is to give Alice $600 per month for child support. Determine how the above transactions affect Bob and Alice’s tax liabilities. Emil and Judy Ryan are married and fi le a joint return. They have no children. Emil is 68 and Judy is 60. 85. They contribute over half of the support for Judy’s mother, Cora, age 85, who earned $800 from baby- sitting jobs and received $1,900 in social security bene fi ts during 2010. Cora lives alone in her own apartment. Emil earned a salary of $60,000 in 2010 from his job at Korma Corp., where Emil is covered by his employer’s pension plan. Judy, who worked part time in 2010 and earned $1,000, is not covered by an employer’s pension plan. Other items received jointly by Emil and Judy in 2010 were as follows: Life insurance proceeds refund 100 Interest on life insurance policy’s accumulated dividends 300 Dividends on stock of a Swiss corporation 500 Dividend on life insurance policy 200
435 Testbank © 2010 CCH. All Rights Reserved. Chapter 4 (a.) How much of the life insurance proceeds should be reported by the Ryans in their 2010 return? (b.) How much interest income should be reported by the Ryans in their 2010 return? Zelda Zayer has been a widow for over three years and fi les a return as a single taxpayer. Items of income 86. received by Zelda in 2010 were as follows: Interest on insurance dividends left on deposit with North American $50 Interest on state income tax refund 25 Gambling winnings 2,400 Dividends from mutual life insurance company on life insurance policy 500 Dividends from Better Auto Co. received on January 2, 2010 875 Total dividends received on the life insurance policy do not exceed the aggregate of the premiums paid to the company. (a.) How much should Zelda include in her 2010 taxable income as interest?
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- Dividend, Taxation in the United States, child support