1. This question is worth 20 points Amber & Bryan (both age 45), are marrid and

Question

1. This question is worth 20 points Amber & Bryan (both age 45), are marrid and file a joing tax retum. 2017 income includes: I. salary of $200,000 2. Amber was in a car accident and received compensatory damages of S25,000 for her broken nose 3. Amber also received punitive damages of $15,000, the person who hit her car was intoxicated 4interest income from Disney bonds in the amount of $1,000 5 refund of 2016 NJ Income Taxes of $2,000 (the couple itemized their deductions in 2016; itemized deductions excceded the standard deduction by $5,000) and Bryan also incurred and paid the following expenses during the year 6 Medical expenses 7 Parking tickets 8 Alimony (Bryan was previously married and pays Alimony to his ex-wife) 12000O 9 Legal fees associated with divorce proceedings-not tax related 300 p 4,000 /No D 2,000 (Exerv 1,000 10,000 Fy onn A 14,500 torna 4,200 (e Hg Charitable contributions - paid on 12/30/17 with a credit card Casualty loss (after S100 floor, but before any further limitations) 12 Mortgage payment on principal residence: principal only 13 Mortgage payment on principal residence: intcrest expense 14 Property taxes (real estate taxes) on personal residence 15) Nephew, Gerardo, owns a home and could not make his property tax 3,000 frovn payment as he is unemployed. Amber paid Gerardo's property taxes (real estate taxes) 16 Federal income tax withheld 18,000 2,000 For Agi 4,000 Fov 14.000 tOm q 1,300 YOm As 17 Qualified Moving expenses in conjuction with a new job 18 Contribution to a traditional IRA 9) Cost of new roof on personal residence 20 NJ income tax withheld A. Identify items 1 through 20 as follows: if income, your response should be: "taxable" or "not taxable, OR if an expense, your response should be: a deduction for AGI, a deduction from AGI or not deductible An item can NOT be classified as both income AND an expense NOTE: When preparing your answer in Part A, do not re-type every item and dollar amount. Number your responses 1-20 and provide your answer. NOTE: Certain items above require special attention. Provide a sentonce or two explaining limitations, rulcs etc. for the following items: 5, 6, 10, 11, 15, 19. Please put the sentence next to your response in B. Using the tax formula, beginning with Income Broadly Conceived, provide a detailed calculation of the couple's 2017 taxable income. Your answer MUST follow the tax formula or points will be deductod! Be certain to compare the standard deduction amount to total itemized deductions

Explanation / Answer

Income Expense A Responses Taxable Non Taxable Deduction for AGI Deduction from AGI Not Deductible 1 Yes - - - 2 - Yes - - - 3 - Yes - - - 4 Yes - - - - 5 Yes - - - - 6 - - Yes - - Elgible for deductions 7 - - - - Yes 8 - - - - Yes 9 - - - - Yes 10 - - - Yes - Charitable contributions are eligible deductions from AGI 11 - - Yes - - Casaulty loss is allowable 12 - - - - Yes 13 - - Yes - - 14 - - Yes - - 15 - - - - Yes Property tax paid on behalf of other person not allowable 16 - - - - Yes 17 - - Yes - - 18 - - - Yes - 19 - - - - Yes Personal expenses not allowable 20 - - - - Yes B Taxable Income $ Salary Income 200000 Interest Income 1000 Refund of NJ Income Tax 2000 Less: Medical expenses 7000 Casaulty loss 1000 Interest payment 14500 Property tax 4200 Moving expense 2000 AGI 174300 Less: Charitable Contribution 2000 Contribution to IRA 4000 Taxable Income 168300

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