Microsoft Word - Exam 2-Take Home XXXXXXXXXXdocx Exam2–TakeHome 1 TonyandJeannieNelsonaremarriedandfileajointreturn. Theyhavefourchildren...

Please provide a quote for the assignment attached. This is pertaining Tax Accounting. The workout as well as all the answers should be completed in the excel as instructed in the word document


Microsoft Word - Exam 2-Take Home-2019-1201.docx Exam2–TakeHome 1 TonyandJeannieNelsonaremarriedandfileajointreturn.Theyhavefourchildren whoseagesare:12,15,19&23.Thethreeyoungestliveathomewiththeirparents andqualifyastheirdependents.TheoldestRogergotmarriedon5/52019and liveswithhiswife,Jane.The19-yearoldTabithaisstudyingFineArtsatSavannah CollegeofArt&Design.Duringthesummershehelpshermotherputtogetherthe artexhibits.Theyprovideyouwiththefollowinginformationregardingtheir2019 upcomingtaxreturn: 1) TonyNelsonisanaerospaceengineerherunsanengineeringfirm,Nelson Engineering(NE),asasoleproprietorshipsince2010. a) NEhasverylucrativecontractswithnumerousaerospacecompaniesand during2019itearned$702,000. b) NErentsanofficedowntownwheretheymeetwithclientsandconducts business.Therentincludesallutilities.NEpaid$38,000inrentexpensein 2019.InDecember2019thelandlordofferedtomaintainthesameyearly rentcostandTonycouldreceiveanadditionalmonth'srentforfreeifhe prepaidhis2020yearrentinadvance.Tonyagreedandpaidanadditional $38,000onDecember1,2019tocoverJanuary2020throughJanuary2021 rent. c) NEobtainedabusinessloanfromSunTrustBankandpaid$2,400inprepaid interestforJune1,2019throughMay30,2020. d) NEhasafewemployees,includinganelectricalengineer,apart-time engineeringinternandanofficemanager.Thecombinedwagesforthese employeesis$196,000.Payrolltaxesincludingfortheseemployeesis $15,000. e) TonytookdifferentbusinessclientstoseeseveralhomeMiamiHeatgames followedbydinnersatnearbyrestaurantswherebusinesswasdiscussed. Themealswerenotconsideredlavish.ThetotalcostfortheHeatticketsand accompanyingmealswere$1,200and$800,respectively. f) InMarch2019,Tonyflewtoatwo-dayengineeringconventionheldin Phoenix,AZrequiringatwo-nighthotelstay.Whilethere,Tonynotedthat theconventiondresscodewasformalwhenhethoughtitwouldbecasual. Tonyimmediatelypurchasedabusinesssuitfor$300(notconsideredlavish) atanearbydepartmentstore.Allfoodcostswerecoveredbytheconvention organizers.OthertripcoststhatTonypaidwereairplaneticket$400and hotellodgingscost$200/night. g) ThedepreciationfortheyearonthefixedassetsownedbyNEareestimated tototal$3,400. Exam2–TakeHome 2 h) AllofNE’sbusinesstransactionsareproperlydocumentedandsupportedby receipts/invoices.Inadditiontodeductibleportionoftheitemslistedabove thebusinesswillhaveanadditional$4,400ofdeductibleotherexpenses. 2) JeannieNelsonisanartist;sheworkspart-timeteachingart2daysaweekata magnetartschoolintheirtown.Sheearned$10,000insalaryfromCocoaBeach, SchooloftheArts,thefollowingitemswerewithheldfromhergrosswages, $1,000federalincometaxes,$100stateincometax,$620socialsecurityand $145Medicare.Sheisnotcoveredundertheirinsuranceplanassheonlyworks 15hoursaweek.Shealsovolunteers5hoursaweekwiththeGirlScoutsof Americaasanartinstructor. 3) JeannieisknownforbeautifulArabianinfluencedabstracts.OnMayandAugust ofthispastyearshehadanexhibitionandsoldpaintingsateachevent.She estimatesthatthecostofeachpaintingincanvasandsuppliesisabout$375. a) Thesalesareasfollows: i) May-16paintingsforatotalof$17,200 ii) August–10paintingsforatotalof$12,000 b) Shepaintsinastudiolocatedinaseparatebuildingonthepropertyoftheir home.Theexpensesrelatedtothestudioallocatedonthebasisofsquare footageareasfollows: i) Depreciation $3,500 ii) Taxes $1,900 iii) Utilities $2,400 4) TheNelsonssoldthefollowingassets/investmentsduringthisyear: a) 4/4/2019soldfor$20,400commonstockinYorkCo.thatwaspurchasedfor $12,000,on2/14/2011,ThesharesofYorkCoarequalifiedsmallbusiness stockunder §1202. b) 7/1/2019sold200sharesofcommonstockinNewCo.for$21,000.They hadpurchased100shareson8/7/2016for$7,500and100shareson 8/7/2017for$8,250. c) 7/15/2019sold150sharesofcommonstockofCityCofor$12,000totalthat werepurchasedfor$13,250on1/18/2019. d) 8/5/2019soldfor$27,000antiquecoinsthatJeannieinheritedfromher great-auntonJanuary16,2019whenitsFMVwas$25,500.Hergreataunt hadabasisinthecoinof$2,000. Exam2–TakeHome 3 e) 10/1/2019,theysoldaportionofaparceloflandwithasmallbuildingfor $45,000thathadabasisof$12,000andwaspurchasedin2002.$30,000of thegainisunrecaptured§1250 property. f) 10/15/2019soldstockinSpaceExplorersInc.for$32,000thattheyhad purchasedon8/14/2015for$28,000. g) TheNelsonshaveaLong-termlosscarryoverof$12,000from2018. 5) OnApril13of2019,thecouplepaidtheir$1,000instatetaxesduewiththeir 2018statetaxreturn.Theypaidstateincometaxfor2019of$3,400.The couple’sestimatedstateandlocalsalestaxesfor2019willbe$2,900.The propertytaxespaidontheirprincipalresidencefor2019is$7,300,excluding anyamountsallottedtotheartiststudio. 6) OnOctober1sttheydonatedaparcelwithaseparatesmallbuildingtotheGirl ScoutsofAmericaforuseasanartstudio.Theyhadpurchasedtheacresin2002 andrecentlydividedaportionforsale(see4eabove).Thisportionhasabasisof $61,500.Aprofessionalappraiserdeterminedthefairmarketvalueofthe propertywas$97,000onSeptember24thof2019. 7) ThisyeartheNelsonshadseveralmedicalexpensesnotreimbursedby insurancetheseareasfollows: a) Tony&Jeanniebothreceivedcorrectiveeyesurgery,atatotalcostof$6,200 b) $2,300forbracesforthe12-yearold c) $1,800inco-paymentsforcoveredmedicalprocedures. d) $400inpaymentsforoverthecountermedications. e) $2,500attheurgentcareclinicforJeannie’sbrotherSamwhohurthisback helpinghersetuptheartexhibitsinMay.Heisnottheirdependent. f) Theypay$7,500inhealthinsurancepremiumstocoverthefamily. 8) TheNelson’sspent$14,100inhomemortgageinterestontheiroriginal acquisitioncostof$800,000from2014.Theydonothaveanyadditional mortgagedebt. 9) TheNelsonspaidquarterlyestimatedtaxpaymentsof$20,000perquarter, basedontheir2018liabilitywhichwasatotalof$72,000. Exam2–TakeHome 4 Usingtheaboveinformationanswerthefollowingquestionsusing theexcelspreadsheetattached,besuretoshowyourwork: A. (10points)ComputethenettaxableincomefromNelsonEngineering. B. (10points)ComputethenettaxableincomerelatedtoJeannie’sAbstracts. C. (20points)Computethegains/(losses)relatedtotheNelsonfamily’ssaleof assetsandtheappropriateclassifications D. (10points)ComputetheitemizeddeductionsoftheNelsonfamily. E. (10points)ReviewandcomputetheamountdeductibleasQBI. F. (10points)ComputetheAdjustedGrossIncomeoftheNelsons. G. (10points)ComputethetaxableincomefortheNelsons. H. (10points)BasedontheinformationprovideddetermineiftheNelsons qualifyforanytaxcreditsandifso,computethecredit(s). I. (10points)Computethetotaltaxliabilityfor2019takingintoaccountthe characterofthetaxableincomecomputedinpartGabove. Understandingthespreadsheet. Thespreadsheetcontainsseveralsheetswhereinformationneedstobeentered. Manyoftheitemsonthefirstsheet,titled“Summary”areinputonothersheets withinthespreadsheetandcarryovertothesummarysheet. Withinthespreadsheetitemsthatrequireyourattentionandinputarehighlighted inabluebackground. Lineswheretheamountiscomputedinanotherareaofthespreadsheetare indicatedinorangeanddoubleunderlined.Thus,youshouldnotneedtoinput anythinginthesecells. Computedcellsareingrey.Thesecellsalsodonotrequireinput.
Mar 13, 2021
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