Mr. and Mrs. Sam Morris retired on February 10, 2013

Comprehensive Problem (Tax Return Problem). Mr. and Mrs. Sam Morris retiredon February 10, 2013, and call you in for tax advice. Both Sam and his wife Sarahhave worked for many years and are both 65 years of age.Facts:Dependent child: Age 21Social Security Benefits$9,900Salaries:Sam (January 1—February 10)7,000Sarah (January 1—February 10)5,500Interest Income:Port Authority of N.Y. Bonds300Interest from Bank Deposits1,400Corporate Bonds900Highway Bonds of Ohio100Dividend Income:Microsoft Common Stock4,000General Electric Common Stock2,000AGA Ltd. of England1,000Net Rental Income4,000One of their tenants moved out on July 14, 2013, and Sam determines that they haddamaged the stove, and therefore returned only $50 of their $150 security deposit.The Morrises’ daughter borrowed $10,000 two years ago to purchase a newautomobile. She has made payments to her parents and on September 1, 2013, only$2,500 was still outstanding on the loan. On their daughter’s birthday, they told hershe no longer had to make payments.Sam was Vice President of a very large corporation. As part of his fringe benefitpackage, the corporation purchased for him $50,000 of group-term life insurance. Thecorporation continues to pay for his life insurance even after retirement.The Morrises’ three children gave their parents a gala retirement party. Manyfriends and relatives were invited. Gifts valued at over $1,000 were received by thecouple.In October, Mrs. Morris entered a contest being run by a local bank. She submitteddrawings for a bank logo. Her drawing was selected and she received $500.Many years ago, Sam purchased an annuity policy for $9,000. Starting on March 3,2013, he began receiving lifelong monthly payments of $60.The Morrises’ 21-year-old daughter is in college. She worked during the summerand earned $2,500. Interest on her savings accounts amounted to $500. Her parentspaid for the college tuition of $4,000.The Morrises have itemized deductions of $14,000.Determine the Morrises’ taxable income for 2013.

 

Looking for a Similar Assignment? Let us take care of your classwork while you enjoy your free time! All papers are written from scratch and are 100% Original. Try us today! Use Code FREE15