Cengage income tax fundamentals 2019

Chapter 2: Gross Income and Exclusions Group 5: Cumulative Software Problem Book Title: Income Tax Fundamentals, 2019 Edition Printed By: Ahmed Almadan (almadana2@csp.edu) © 2019 Cengage Learning, Cengage Learning

Questions and Problems

Group 5: Cumulative Software Problem

The following additional information is available for the family of Albert and Allison Gaytor.

In 2018, Albert received a Form W-2 from his employer, Coconut Grove Fishing Charters, Inc. (hint: slightly modified from Chapter 1):

In addition to the interest from Chapter 1, Albert and Allison also received three Forms 1099:

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The Gaytors also received interest of $745 from bonds issued by the Miami-

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Dade County Airport Authority (Form 1099 not shown).

Albert went to the casino on his birthday and won big, as reflected on the following Form W-2G:

Albert had no other gambling income or losses for the year.

In February, Allison received $50,000 in life insurance proceeds from the death of her friend, Sharon.

In July, Albert’s uncle Ivan died and left him real estate (undeveloped land) worth $72,000.

Five years ago, Albert and Allison divorced. Albert married Iris, but the marriage did not work out and they divorced a year later. Under the 2014 divorce decree, Albert pays Iris $11,500 per year in alimony. All payments were on time in 2018 and Iris’ Social Security number is 667-34-9224. Three years ago, Albert and Allison were remarried.

Coconut Fishing Charters, Inc. pays Albert’s captain’s license fees and membership dues to the Charter Fisherman’s Association. During 2018, Coconut Fishing paid $1,300 for such dues and fees for Albert.

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Allison was laid off from her job on January 2, 2018. She received a Form 1099-G for unemployment benefits:

Albert and his family are covered by an employee-sponsored health plan at his work. Coconut Fishing pays $700 per month in premiums for Albert and his family. During the year, Allison was in the hospital for appendix surgery. The bill for the surgery was $10,100 of which the health insurance reimbursed Albert the full $10,100.

Coconut Fishing also pays for Albert’s parking at the marina. The monthly cost is $120.

Required: Combine this new information about the Gaytor family with the information from Chapter 1 and complete a revised 2018 tax return for Albert and Allison. Be sure to save your data input files since this case will be expanded with more tax information in later chapters.

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Chapter 2: Gross Income and Exclusions Group 5: Cumulative Software Problem Book Title: Income Tax Fundamentals, 2019 Edition

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Printed By: Ahmed Almadan (almadana2@csp.edu) © 2019 Cengage Learning, Cengage Learning

© 2019 Cengage Learning Inc. All rights reserved. No part of this work may by reproduced or used in any form or by any means - graphic, electronic, or mechanical, or in any other manner - without the written permission of the copyright holder.