Problem 4-20 points n 2017 lames (age 35) moved from Chicago to San Francisco af

Question

Problem 4-20 points n 2017 lames (age 35) moved from Chicago to San Francisco after getting a new job. He spent and spent 5770 on gas, $1,200 Salary from Google in Chicago 7,000 in shipping his goods from Chicago to San Francisco James drove across country to his new home on accomadation and $385 on food during the trip. His company reimbursed him $$,000 250,000 Part of the reason he left Chicago was that his company had sent him to Idaho for 3 months to oversee operations there. He returned to Chicago every weekend. Cost of flying home each weekend was $350, and it he had stayed in Idaho the costs would have been $430 Salary from Apple in San Francisco Received dividend income from Microsoft of Received life insurance proceeds from the death of his uncle 400,000 60,000 2,000 16,000 Received a gift from his aunt Made a gift to his friend in his divorce from his wile (who did not want to move to California), James received stocks with a basis of $700,000 and a FMV of $800,000 16,000 (21,000) Paid unreimbursed job hunting expenses of Paid Chicago income tases of Paid California income taxes of 25,000) In December, lames sold the bonds [received in the divorce) to his brother for 3 months later his brother sold the stocks for lames also rented out his vacation home for 10 days 30,000 lames was injured in a car accident when he moved to San Francisco and sued the driver. He received the loilowing settlement: Physical injuries Lass of income Punitive damages 0,000 A What is James adjusted gross income for the year? C D What is James' taxable income for the year? What is James' net tal ability for the year?lenore AMT) How would your answer be different using 2018 law?

Explanation / Answer

4A. - James' Gross Income - $3,383,000

B. James' Taxable Income - $3,318,000

C. James' Tax Liability - $65,000

D. In 2018, his tax liability would be 40% = $1,327,200

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