Andrea entered into a § 529 qualified tuition program for the benefit of her daughter, Joanna. Andrea contributed $15,000 to the fund. Thefund balance had accumulated to $25,000 by the time Joanna was ready to enter college. However, Joanna received a scholarship that paidfor her tuition, fees, books, supplies, and room and board. So Andrea withdrew the funds from the § 529 plan and bought Joanna a newcar.If an amount is zero, enter "0".a. What are the tax consequences to Andrea of withdrawing the funds?Andrea includes $in her gross income and Joanna includes $Is Andrea or Joanna subject to a penalty?b. Assume instead that Joanna's scholarship did not cover her room and board, which cost $7,500 per academic year. During the currentyear, $7,500 of the fund balance was used to pay for Joanna's room and board. The remaining amount was left in the 5 529 plan to coverher room and board for future academic years.What are the tax consequences to Andrea and to Joanna of using the $7,500 to pay for the room and board?Andrea includes $in her gross income and Joanna includes $ Is Andrea or Joanna subject to a penalty?Both Andrea and JoannaNeither Andrea nor JoannaOnly AndreaOnly Joannaher room and board for future academic years.anna's scholarship did not cover her room and board, which cost $7,500 per academic year. During the currentlance was used to pay for Joanna's room and board. The remaining amount was left in the § 529 plan to cover

Taxes are the amount of dues or liabilities that should be paid by individuals to the government on…

Answered: Andrea entered into a § 529 qualified…

SWFT Comprehensive Vol 2020

43rd Edition

ISBN:9780357391723

Author:Maloney

Publisher:Maloney

Chapter5: Gross Income: Exclusions

Section: Chapter Questions

Problem 17DQ

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Paul Barrone is a graduate student at State University. His 10-year-old son, Jamie, lives with him, and Paul is Jamies sole support. Pauls wife died in 2018, and Paul has not remarried. Paul received 320,000 of life insurance proceeds (related to his wifes death) in early 2019 and immediately invested the entire amount as shown below. Paul had 42,000 of taxable graduate assistant earnings from State University and received a 10,000 scholarship. He used 8,000 of the scholarship to pay his tuition and fees for the year and 2,000 for Jamies day care. Jamie attended Little Kids Daycare Center, a state-certified child care facility. Paul received a statement related to the Green bonds saying that there was 45 of original issue discount amortization during 2019. Paul maintains the receipts for the sales taxes he paid of 735. Paul lives at 1610 Cherry Lane, Bradenton, FL 34212, and his Social Security number is 111-11-1111. Jamies Social Security number is 123-45-6789. The university withheld 2,000 of Federal income tax from Pauls salary. Paul is not itemizing his deductions. Part 1Tax Computation Compute Pauls lowest tax liability for 2019. Part 2Tax Planning Paul is concerned because the Green bonds were worth only 18,000 at the end of 2019, 5,000 less than he paid for them. He is an inexperienced investor and wants to know if this 5,000 is deductible. The bonds had original issue discount of 2,000 when he purchased them, and he is curious about how that affects his investment in the bonds. The bonds had 20 years left to maturity when he purchased them. Draft a brief letter to Paul explaining how to handle these items. Also prepare a memo for Pauls tax file.
LO.2Andrea entered into a § 529 qualified tuition program for the benefit of her daughter, Joanna. Andrea contributed $15,000 to the fund. The fund balance had accumulated to $25,000 by the time Joanna was ready to enter college. However, Joanna received a scholarship that paid for her tuition, fees, books, supplies, and room and board. So Andrea withdrew the funds from the § 529 plan and bought Joanna a new car. What are the tax consequences to Andrea of withdrawing the funds? Assume instead that Joanna’s scholarship did not cover her room and board, which cost $7,500 per academic year. During the current year, $7,500 of the fund balance was used to pay for Joanna’s room and board. The remaining amount was left in the § 529 plan to cover her room and board for future academic years. What are the tax consequences to Andrea and to Joanna of using the $7,500 to pay for the room and board?
Allison receives a scholarship of $20,000 from ODU to be used to pursue a bachelor's degree. She spends $12,000 on tuition, $2,000 on books and supplies, $5,000 for room and board, and $1,000 for personal expenses. How much of the shcolarship may Allison exclude from her gross income?
Andrea entered into a § 529 qualified tuition program for the benefit of herdaughter, Joanna. Andrea contributed $15,000 to the fund. The fund balancehad accumulated to $25,000 by the time Joanna was ready to enter college. However,Joanna received a scholarship that paid for her tuition, fees, books, supplies,and room and board. So Andrea withdrew the funds from the § 529 plan and boughtJoanna a new car.a. What are the tax consequences to Andrea of withdrawing the funds?b. Assume instead that Joanna’s scholarship did not cover her room and board,which cost $7,500 per academic year. During the current year, $7,500 of thefund balance was used to pay for Joanna’s room and board. The remainingamount was left in the § 529 plan to cover her room and board for future academicyears. What are the tax consequences to Andrea and to Joanna of usingthe $7,500 to pay for the room and board?
Nora invested $8,000 in a qualified tuition program for the benefit of her son. Four years later her son, Michael withdrew $10,000, the entire balance in the program, to pay his college tuition. How much must Nora and/or Michael include in gross income? Nora: $0 Michael: $0 Nora: $2,000 Michael: $0 Nora: $0 Michael: $2,000 Nora: $2,000 Michael: $8,000 Nora: $0 Michael: $10,000
Suzanna earns $4000 in her summertime job; the rest of the year she attends college fulltime. Suzanna may claim an exemption from FIT withholding if: a.she also has a taxable scholarship (used for housing) = $15,000. b.her unearned income (interest) = $1698. c.her aunt claims her as a dependent and she has no unearned income. d.her unearned income (dividends) = $1800.
Mark's child, Mary, graduated from school 7 months ago. Mark took out an educational loan to pay for mary's school. This year Mark paid a student loan interest of 2100 and has adjusted gross income of $82,000 and files as head of household. Since Mark still claims Mary as a dependent Mark wants to know how much if any, of the student loan interest can he use for an AGI deduction.
Kim and David were both born in 1965 and would like to understand how much they would receive from Social Security (in today's dollars) if they were to retire at age 62, FRA, or age 70. Kim has never worked and currently volunteers with local charities; she does not receive any compensation. Based upon David's earnings history, he is eligible for a PIA of $2,000 (today's dollars). Calculate the amount that Kim and David would each be eligible to receive at ages 62, FRA, and 70. Calculate the benefit amounts in today's dollars (i.e., ignore any future COLA adjustments). 62 FRA 70 62 FRA 70 62 FRA 70 62 FRA 70 None of the above Kim $650 $1,000 $1,000 Kim $650 $1,000 $1,240 Kim $700 $1,000 $1,000 Kim $700 $1,000 $1,320 David $1,400 $2,000 $2,480 David $1,400 $2,000 $2,480 David $1,500 $2,000 $2,640 David $1,500 $2,000 $2,640
Alex, age 24, had an HSA account set up with her employer, Target, that had $5,000 in the account at the end of the year. She then quit her job in July and withdrew the funds. She had no qualifying medical expenses during 2022. Instead, she used the funds from the HSA to buy a used car she had wanted for a while. What is the tax consequence of this action? Group of answer choices Nothing. Taxpayers are allowed to withdraw from their HSA accounts at any time. Her withdraw is prohibited and will result in a forfeiture of the funds. Alex must pay income tax and a 6% penalty on the withdrawal. Alex must pay income tax and a 20% penalty on the withdrawal.
Sunya established a qualified tuition program for each of his twins, Kim and Jim. He started each fund with $22,000 when the children were five years old. Sunya made no further contributions to his children’s plans. Thirteen years later, both children have graduated from high school. Kim’s fund has accumulated to $45,000, and Jim’s has accumulated to $42,000. Kim decides to attend a state university, which will cost $60,000 for four years (tuition, fees, room and board, and books). Jim decides to go to work instead of going to college. During the current year, $7,500 is used from Kim’s plan to pay the cost of her first semester in college. Because Jim is not going to college now or in the future, Sunya withdraws the $42,000 plan balance and gives it to Jim to start his new life after high school. What are the tax consequences to Jim (is any amount taxable and why) of Jim’s qualified tuition program being closed?
The Samsons are trying to determine whether they can claim their 22-year-old adopted son, Jason, as a dependent. Jason is currently a full-time student at an out-of-state university. Jason lived in his parents' home for three months of the year, and he was away at school for the rest of the year. He received $9,500 in scholarships this year for his outstanding academic performance and earned $4,800 of income working a part-time job during the year. The Samsons paid a total of $5,000 to support Jason while he was away at college. Jason used the scholarship, the earnings from the part-time job, and the money from the Samsons as his only sources of support. Required: Can the Samsons claim Jason as their dependent? Assume the original facts except that Jason's grandparents, not the Samsons, provided Jason with the $5,000 worth of support. Can the Samsons (Jason's parents) claim Jason as their dependent? Assume the original facts except substitute Jason’s grandparents for his parents.…
Jarrod receives a scholarship of $28,000 from East State University to be used to pursue a bachelor's degree. He spends $16,800 on tuition, $1,400 on books and supplies, $5,600 for room and board, and $4,200 for personal expenses. How much may Jarrod exclude from his gross income? $ Carl, age 72, is an officer of Blue Company, which provides him with the following nondiscriminatory fringe benefits in 2023: • Hospitalization insurance premiums for Carl and his dependents. The cost of the coverage for Carl is $3,325 per year, and the additional cost for his dependents is $4,475 per year. The plan has a $3,000 deductible, but his employer contributed $1,500 to Carl's Health Savings Account (HSA). Carl withdrew only $750 from the HSA, and the account earned $55 of interest during the year. • Insurance premiums of $1,050 for salary continuation payments. Under the plan, Carl will receive his regular salary in the event he is unable to work due to illness. Carl collected $4,400 on the policy…

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