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1 Mid-Term Exam PROBLEM 1 Thomas J. (born 5/26/1957) and Catalina I. Adran (born 6/7/1961) are married and live at 22 Arcade Place, Richmond, VA 23240.

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Presentation on theme: "1 Mid-Term Exam PROBLEM 1 Thomas J. (born 5/26/1957) and Catalina I. Adran (born 6/7/1961) are married and live at 22 Arcade Place, Richmond, VA 23240."— Presentation transcript:

1 1 Mid-Term Exam PROBLEM 1 Thomas J. (born 5/26/1957) and Catalina I. Adran (born 6/7/1961) are married and live at 22 Arcade Place, Richmond, VA Tom is a computer programmer and Catalina is a school clerk. They have three children - Peter, Marie, and Martin. Tom and Catalina provided all of the support for their children. Peter (SSN , born 5/26/1986) is a full-time college student and worked at a pet store part-time where he earned $4,000. Marie (SSN , born 2/10/1991) is a full-time high school student and worked at a supermarket earning $3,100. Peter and Marie had no other income. Martin (SSN , born 7/4/2000) had no income.

2 2 Mid-Term Exam The Adrans filed a joint return in 2007 and had itemized deductions of $11,000. Their 2007 state income tax deduction was $2,990 and the sales tax deduction they could have taken was $657. In 2008, the Adrans paid the following expenses: Dental bills$ 415 Real estate taxes$1,850 Medical bills$ 825 State balance due for 2006 return paid in 2008$ 225 Hearing aid (Marie)$ 225 Goodwill contribution (clothing FMV)$ 180 Toothpaste and other toiletries$ 115 Athletic club membership$ 650 Family health insurance$1,550 Church donations (no single amount over $250)$ 580 Prescription drugs$ 195 Personal property taxes$ 405 Back brace (Peter)$ 185 Neighborhood civic league$ 20 Prepare the Adran’s return for 2008.

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15 15 Mid-Term Exam PROBLEM 2 Tracy B. Good (born 4/8/1970) pays all the costs of keeping up a home located at 211 Laguna Lane, San Jose, CA for herself and her daughter Ellen T. Good (SSN , born 5/12/1992). Tracy and her husband Rod were divorced in 2003 and Tracy signed an agreement allowing Rod to claim the exemption for Ellen. Ellen spends three months of the year with her father. In March of 2008, Tracy’s nephew, Stanley Good (SSN , born 12/7/1995), came to live with her. She provided all of his support. Tracy is a clerk in a jewelry store. She also earns extra money as a waitress. In 2008, Tracy reported tips to her employer as required. Her tip record showed she also received $52 (not more than $19 in any month) in tips she was not required to report to her employer.

16 16 Mid-Term Exam In 2008, Tracy received alimony payments of $300 per month from Rod. Rod also pays Tracy $200 per month child support payments for Ellen. Tracy received a state refund of $250 on her 2007 state return. She did not itemize deductions in Prepare a 2008 tax return for Tracy.

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31 31 Mid-Term Exam PROBLEM 3 Caroline F. (born 2/09/1958) and Roger A. Buckley (born 11/10/1957) are married and both work full time. Caroline is an attorney and Roger is a bookkeeper. Caroline’s father, Conrad Nagle (SSN , born 04/03/1934), lives with them and they provide most of his support. Conrad’s only income in 2008 was $3,600 from a pension and $6,000 in social security benefits.

32 32 Mid-Term Exam They have two children who lived with them all year and they provide all of their support. Their son Albert (SSN , born 12/10/1982) is severely disabled and cannot work or care for himself. When Roger and Caroline are at work, Albert receives care from Helping Hands (EIN ), 45 Larch St., Greensboro, NC In 2008, they paid $5,875 for Albert’s care. In 2008, the Buckley’s also paid $2,890 for after school care for their daughter Lily (SSN , born 8/4/2003) so they could work. Lilly stayed with a neighbor, Anne Richards (SSN ), 1474 Parker Avenue, Greensboro, NC

33 33 Mid-Term Exam Roger donated $200 per month to the United Way through a payroll deduction plan. Their itemized deductions for 2007 were $17,470 and they filed a joint return. Their 2007 state income tax deduction was $6,190 and the sales tax deduction they could have taken was $1,475. In addition to the W-2 forms and 1099 forms provided, Roger also won the Jackpot Lottery for $800. His lottery and bingo losses were $500. Prepare the Buckley’s 2008 tax return.

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