Zelda Zayer has been a widow for over three years and fi les a return as a singl
ID: 2581696 • Letter: Z
Question
Zelda Zayer has been a widow for over three years and fi les a return as a single taxpayer. Items of income received by Zelda in 2016 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, 2016 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 2016 taxable income as interest? (b.) How much should Zelda report as dividend income for 2016? (c.) How much should Zelda include in taxable “Other Income” for her state lottery winnings? Zelda Zayer has been a widow for over three years and fi les a return as a single taxpayer. Items of income received by Zelda in 2016 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, 2016 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 2016 taxable income as interest? (b.) How much should Zelda report as dividend income for 2016? (c.) How much should Zelda include in taxable “Other Income” for her state lottery winnings? Zelda Zayer has been a widow for over three years and fi les a return as a single taxpayer. Items of income received by Zelda in 2016 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, 2016 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 2016 taxable income as interest? (b.) How much should Zelda report as dividend income for 2016? (c.) How much should Zelda include in taxable “Other Income” for her state lottery winnings?Explanation / Answer
a. Taxable interest: 75 (Both Interst on state income tax refund and on insurance diviends left on deposit are taxable).
b. Divedend taxable: 875 (Dividends from mutual life insurance company on life insurance policy not taxable)
c. Lottery Winning: 2400 in other income to be taken.
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