Cash Received Interest on savings account $1,728 Gift of money from parent $1,00
ID: 2752192 • Letter: C
Question
Cash Received
Interest on savings account $1,728
Gift of money from parent $1,000
Rent from farmland owed $30,000
Proceeds of life insurance policy received upon parent's death $40,000
Nondegree candidate fellowship, granted 8/20/14, of $450 per month for four months $1,800
Net pay received (Gross salary of $33,000 less $7,440 state and federal income taxes, $2,046 social security taxes, and $479 Medicare taxes) $23,035
Employer's share of health insurance premiums, $4,260 $0
De minimis employee fringe benefits valued at $25 $0
Company provided parking costing employer $300/month for 12 months $0
Total cash received $97,563
Cash Payments
Expenses of farmland rental (real estate taxes) $1,750
Personal living expenses $26,600
Total cash payments $28,350
Use information above to compute the 2014 taxable income and tax liability for an unmarried taxpayer (age 52 with no dependents). Prepare an analysis showing each item and amount under the appropriate headings of (1) income, (2) gross income exclusions, (3) total gross income, (4) deductions for AGI, (5) AGI, (6) deductions from AGI, and (7) taxable income.
Explanation / Answer
Interest on savings account $1,728
Gift of money from parent $1,000
Rent from farmland owed $30,000
Proceeds of life insurance policy received upon parent's death $40,000
Nondegree candidate fellowship, granted 8/20/14, of $450 per month for four months $1,800
Net pay received (Gross salary of $33,000 less $7,440 state and federal income taxes, $2,046 social security taxes, and $479 Medicare taxes) $23,035
Employer's share of health insurance premiums, $4,260 $0
De minimis employee fringe benefits valued at $25 $0
Company provided parking costing employer $300/month for 12 months $0
Total cash received $97,563
Less:Cash Payments
Expenses of farmland rental (real estate taxes) $1,750
Personal living expenses $26,600
Total cash payments ( $28,350)
(1)income $69,213
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