Solve the below problem:
1)Lakshmi is single and provides you with the following tax information for 2012 Salary $200,000 Bank account interest $1,000 Capital gain on an asset (stock) held for 11 months 4,000 Capital gain on an asset (stock) held for 16 months 9,000 Capital gain on an asset (antique doll) held for 30 months 5,000 Itemized deductions 8,000 Compute her tax liability.
2)During the current year, Donna, a single taxpayer, report the following items income of income and expenses Income Salary $86,000 Muncipal bond interest 1,300 Alimony received 24,000 Capital gain on an asset held less than one year $3,000 Rental Income from residential rental house 12,500 Expenses/losses: Interest on principal residence 8.000 Real estate taxes on principal residence 1,000 Capital loss on an asset held less than one year 7,000 Expenses related to rental property Mortgage interest 6,000 Repairs 2,400 Taxes 700 Depreciation 1,200 Compute Donn's taxable income.
3)Lindsey Forbes, a detective who is single, operates a small pottery activity in her spare time. This year she reported the following income and expense from this activity Revenue from sale of pottery $9,000 Depreciation on potter's wheel (3,000) Property taxes on shed where she does pottery (1,200) Supplies used such as clay, etc. (6,500) In addition, she had salary of $70,000 and itemized deductions, not including expenses listed above, of $6,100.
a. What is the amount of lindsey's taxable income assuming the activity is classified as a hobby?
b. What is the amount of Lindsey's taxable income assuming the activity is classified as a trade or business?
4) Phoebe's AGI for the current year is $120,000. Included in this AGI IS $100,000 salary and $20,000 of interest income. In earning the investment income, Phoebe paid investment interest expense of $30,000. She also incurred the following expenditures subject to the 2% of AGI limitation. Investment expenses: Subscriptions to investment journals $500 Investment counseling 1,500 Safe-deposit box rental for stock certificates 100 Nonineivestment expenses: Unreimbursed employee business expenses $1,800 Tax return preparation fees (non-business-related) 500 What is Phoebe's investment interest expense deduction for the year?
5) Parveen is married and files a joint return. He reports the following items of income and loss for the year: Salary $135,000 Activity A(passive) 13,000 Activity B(nonbusiness rental real estate) (45,000) If Parveen actively participates in the management of Activity B, what is his AGI for the year and what is the passive loss carryover to next year?
6)If a loan actively has made to a related party, what are some considerations for determining whether the loan is a bona fide debt or is in fact, merely a gift?
7)What are some factors which indicate that a debt may be worthless?