Q1. Geier Textbook - Chapter 1 - Page 43
1. David and Daphne are married and have no children. David is a police sergeant who earns $65,000 in 2015, and Daphne is a registered nurse who earns $75,000 in 2015. They earn no investment income in 2015, but they did receive a $10,000 gift from Daphne's mom. See § 102(a). David and Daphne file a joint return in 2015 and take the Standard Deduction.
a. What is Daphne's and David's Adjusted Gross Income (AGI) and Taxable Income for 2015?
b. What is Daphne's and David's marginal tax rate? Their effective tax rate (using AGI)?
Questions 2 - Use the information from this question (Sheila and Shane) to complete page 2 (only) of Form 1040. (You completed page 1 last week) This form can be found at irs.gov. Use the form for 2015. You can hand write to complete the form or complete electronically. You completed page 1 of the Form 1040 last week. For page 2, you will need to become familiar with the tax tables. Please itemize deductions (Schedule A) using the information in the problem. Assume that federal tax withheld is $30,000.
Q2. From the Geier textbook, answer the Problem on page 175 of Chapter 6.
Geier Textbook link - https://www.cali.org/sites/default/files/2015Geier_Tax_0.pdf
Q3. Complete a Schedule C (Business Income) (2015) based on a fictitious business that you own. Complete all applicable lines and boxes at the top of the form (A - J). Include at least one type of revenue. Include five different expenses. Calculate your profit or loss. Self-employed taxpayers must pay Self-Employment (SE) tax on profits. You may ignore SE tax for this exercise. Schedule C can be found at irs.gov under Forms and Publications.
Q4. This week's assignment is to complete a Schedule E - rental income for 2015. Imagine that at the end of 2014 you inherited a house. For the first 3 months of 2015 the house was empty. For the second 3 months, you rented the house to your cousin for $200 per month (below market value). For the last 6 months, you rented the house through a property manager for $950 per month.
Expenses are:
Property manager fees (6 months) = $95 per month.
Property tax for whole year = $2000
Property insurance for whole year = $1000
Cleaning fee = $550
Utilities for whole year = $200 per month
Landscaping for whole year = $100 per month
Repairs for whole year = $150 per month
Tree removal = $5500
Depreciation expense = $850 per month.
Decide what expenses are deductible and which ones are not. Consider the months the house was empty and the months the house was rented to a cousin at a below market value rental rate. Read the instructions for preparing Schedule E. Make assumptions as to any information that is missing.