Reference no: EM132574215
Question 1 - Randy and Sharon are married and have two dependent children. Their 2019 tax and other related information is as follows:
Total salaries $160,000
Bank account interest income 3,500
Municipal bond interest income 1,500
Value of employer provided medical insurance 12,500
Employer paid premiums for $50,000 of group term life insurance 5,500
Dividend income from ABC stock 2,000
Loan from Randy's parents 5,000
Gift from Randy's parents 15,000
Gain from the sale of qualified small business stock acquired in 2008 18,000
Total itemized deductions 27,000
Required - Compute Randy and Sharon's taxable income. (Show all calculations in good form.)
Question 2 - Kevin is a single person who earns $70,000 in salary for 2019 and has other income from a variety of investments, as follows:
Bank savings account interest $5,500
Interest from State of Missouri Bonds 3,500
Dividends from XYZ Corp. 7,000
Kevin received tax refunds when he filed his 2018 tax returns in April 2019. His federal refund was $600 and his state refund was $300. Kevin included his state taxes paid in 2018 in his $14,000 of itemized deduction on his 2018 return. Due to changes in circumstances, Kevin is not itemizing deductions on his 2019 return.
Required - Compute Kevin's taxable income for 2019.