Spilker Taxation of Individuals and Business Entities Roger CPA Review Qu.011 Kr

Question

Spilker Taxation of Individuals and Business Entities Roger CPA Review Qu.011 Kris quit his job in November of Year 1 to take care of the children after Kris's spouse, Janice, was killed in a car accident. On January 1, Year 2, Kris sells the large house they have lived in for the last five years and moves about 300 miles away to rent a smaller house near Kris's parents in Smalltown, Florida. Kris started a new full-time job on July 1, Year 2. Kris has the following income and expense items for Year 2: wages Donations received from the community Life insurance proceeds Gain on the sale of principal residence Moving expenses $17,500 15,000 $20,000 50,000 (S 2,500) What is Kris's adjusted gross income for Year 2? Multiple Choice $15,000 $17,500 $30,000 Activate Windows

Explanation / Answer

$ wages    17,500.00 Donations received from the community                   -   (Not taxable as it is a gift) Life insurance proceeds                   -   (not taxable as it is proceed due to death of his wife.any interest received from life insurance is taxable) Gain on the sale of principal residence                   -   (capital gain from the sale of your main home,upto ) $ 250000 of that gain can be excluded from your capital gain Moving expenses -   2,500.00 (if relocation relates to starting a new job or transfer to a new location(more than 50 miles away from your old job ) for your present employer) Adjusted gross income    15,000.00 Option A is correct that is $ 15000

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