Carlton purchases land for $550,000. He incurs legal fees of…
Carlton purchases land for $550,000. He incurs legal fees of $10,000 and broker’s commission of $28,000 associated with the purchase. He subsequently incurs additional legal fees of $25,000 in having the land rezoned from agricultural to residential. He subdivides the land and installs streets and sewers at a cost of $800,000. What is Carlton’s basis for the land and the improvements?
Read DetailsJasmine made a $60,000 interest-free loan to her son, Farhad…
Jasmine made a $60,000 interest-free loan to her son, Farhad, who used the money to start a new business. Farhad’s only sources of income were $25,000 from the business and $490 of interest on his checking account. The relevant Federal interest rate was 5%. Based on this information:
Read DetailsRobyn rents her beach house for 60 days and uses it for pers…
Robyn rents her beach house for 60 days and uses it for personal use for 30 days during the year. The rental income is $6,000 and the expenses are as follows: Mortgage interest $9,000 Real estate taxes 3,000 Utilities 2,000 Maintenance 1,000 Insurance 500 Depreciation (rental part) 4,000 Using the IRS approach, total expenses that Robyn can deduct on her tax return associated with the beach house are:
Read DetailsFred and Lucy are married, ages 33 and 32, and together have…
Fred and Lucy are married, ages 33 and 32, and together have AGI of $120,000 in 2024. They have four dependents and file a joint return. They pay $5,000 for a high deductible health insurance policy and contribute $2,600 to a qualified Health Savings Account. During the year, they paid the following amounts for medical care: $9,200 in doctor and dentist bills and hospital expenses, and $3,000 for prescribed medicine and drugs. In October 2024, they received an insurance reimbursement of $4,400 for the hospitalization. They expect to receive an additional reimbursement of $1,000 in January 2025. Determine the maximum itemized deduction allowable for medical expenses in 2024.
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