Which of the following amounts is the powers taxable


Show all COMPLETE calculations that come up with the correct answer below.

James and Molly are married couples, both 62 years old and both retired from their respective companies last year. Both James and Molly rolled their employer retirement accounts over into self-directed individual retirement accounts. James is starting withdrawals from his account this year. They are planning to hold off on withdrawals from Molly's account until the required age of 701/2. Their daughter jane has a child, a three year-old named Nancy. Molly and her husband are in the 25% tax bracket. When Nancy was born, the Powers set up a Crummey trust for her, which they funded with a tax-exempt joint gift of $20,000 and a subsequent gift of $8,000 the following year. After spending the last six months traveling around Europe and the Caribbean, the Powers would like to settle down and establish a counseling service for high school students planning to enter college and for college students looking forward to entering the job market. They have discussed this with another couple with similar interests and backgrounds and jointly feel there is a large potential market in their metropolitan area. Net annual income from the counseling service is estimated at $60,000. The Powers own their own home and a hillside vacation lodge in Vermont. The use the lodge infrequently, no more than a week or ten days per year, and manage the rental and maintenance of the property themselves. The Powers are interested in getting into their own business, having significant income, and in minimizing their tax burden. Their anticipated financial information for 2017 is as follows:

Salary $ 0

Taxable interest income 6,800

Tax-exempt interest 2,200

Dividend income 16,000

fame's IRA distribution 48,000

Rental income from lodge 3,300

Long-term capital gain 3,800

Short-term capital gain 1,260

Loss from oil and gas working interest 1,020

Lucy's trust income 2,100

Medical and dental expense 3,200

State and local income taxes 1,200

Real estate taxes (home) 2,300

Real estate taxes (lodge) 600

Mortgage interest (home) 7,000

Rental costs (lodge) 910

Carryover long-term capital 680

Gifts to charity 2,940

Which of the following amounts is the Powers' taxable income? (MUST SHOW ALL COMPLETE CALCULATIONS)

A. $54,610 B. $55,650 C. $58,560 D. $62,510 E. $68,050

Request for Solution File

Ask an Expert for Answer!!
Financial Management: Which of the following amounts is the powers taxable
Reference No:- TGS02850153

Expected delivery within 24 Hours