Reference no: EM133361

Question :

Juan Luan, Social Security number 454-11-7000, is a single taxpayer and is employed as an administrative help at Ake Shipping in Jacksonville, FL. He has the subsequent items pertaining to his income tax return for the present year:

• Received a $40,000 salary from his employer, who withheld $7,000 in federal income tax.
• Received a gift of 1,000 shares of Zeta Corporation stock with a $100,000 FMV from his mother. He also get $4,000 of cash dividends from the Zeta Corporation. The dividends are qualified dividends.
• Received $1,000 of interest income on bonds issued by the City of Jacksonville.
• Received a regular stock dividend nontaxable under Sec. 305 of 50 shares of Zeta Corporation stock with a $5,000 FMV.
• Ace paid $6,000 of health and medical insurance premiums on his behalf under an insurance plan that covers all Ace employees
• Received $12,000 alimony from his ex-wife.
• Ace provided $80,000 of group term life insurance. Andy is 54 years old and is not a key employee. Table, Regulation §1.79-3(d)(2) applies
• Received a $2,500 cash award from his employer for being designated the Employee of the Year.
• Total itemized deductions are $8,000.