USA TAX RULE 2015
1. In 2014, Bob, a single individual, provided support for his 90 year old mother who did not live with him. In 2014, Bob had Agi of $300000 consisting of wages of $200000 and interest income of $100000. The wage income had federal withholding of $40000. Bob also had the follwing itemized deductions in 2014.
Medical $1000
Real Estate Tax $5000
State income tax withholding $10000
Home Mortgage interest $8000
Charitable Contributions $ 4000
When Bob filed his federal and state income tax returns in Aprl, 2015 the returns showded a federal refund of 10000 and a state tax refund of 3000. He received both of these refunds in June, 2015
In 2015, Bob had the following additional information
Wages $360000
Interest Income $10000
Long term capital gains $18000
Short term capital losses $12000
Alimony Paid $24000
Child support payments $18000
Reimbursed business expenses $1000
Divided income $10000
Itemized deductions $11000
Compute Bob's AGI, Taxable income and tax liability for 2015. (Assume that 2014 also used Tax rule for 2015)
2. Claude and Maude (cash basis taxpayers) are married and have 2 children, Rod and Tod. Tod is a single college student, 20years old and earned $8000 during the year and lives at home during the year. Tod received a full scholarship cover the following expenses: Room and Board: $10000, Tuition: $40000, Other: $5000.
Tod saved all of his money, ie non of it went towards his support
Rod, who is 23 years old lived at hoe, made $ 35000 and paid for all of his own support
Claude is a commercial airline pilot. He earned $300000 and had federal withholding of $ 90000
Maude has her own trade or business selling clothes. She had revenue of $23000 and business expenses of $30000
Maude also enjoys playing guitar and occasionally plays as part of a band. For that she had gross revenue of $5000 and expenses related to that income of $3000.
Cluade's father passed away during the year and Claude inherited $100000. Calude did not pay for any of the premiums and was the named beneficiary.
Clude and Maude had the following other sources of income:
Interest income from US Treasury Bonds: $20000
Interest from state of Mass : $5000
Dividends from Apple stock: $8000
Short term capital gains: $15000
Long term capital gains: $4000
Rental income: $10000
Rental expense: $11000
Claude and Maude had previously been lent money from a friend in the amount of $20000 which was never paid back and forgive by the friend in the current year.
In addition to the above information, Claude and Maude had other itemized deductions of $40000.
Assume that there is no limitation on the itemized deductions other than the normal phase out, if any.
Calculate the tax due or refund for Claude and Maude for the year. (Tax rule: 2015)