Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer. a. Ken won $1,540 in an illegal game of poker (the game was played in Utah, where gambling is illegal). b. Ken sold 1,340 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share. c. Ken received $28,400 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $238,560. d. Ken received $13,850 in disability benefits for the year. He purchased the disability insurance policy last year. e. Ken decided to go back to school to learn about European history. He received a $840 cash scholarship to attend. He used $470 to pay for his books and tuition, and he applied the rest toward his new car payment. f. Ken's son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike to Ken. Ken received the check on December 30 in the amount of $1,610. g. Ken received a $780 refund of the $3,940 in state income taxes his employer withheld from his pay last year. Ken claimed $12,940 in itemized deductions last year (the standard deduction for a single filer was $12,550). h. Ken received $33,400 of interest from corporate bonds and money market accounts. 1. Determine Ken's gross income. Gross income
Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single taxpayer. a. Ken won $1,540 in an illegal game of poker (the game was played in Utah, where gambling is illegal). b. Ken sold 1,340 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the stock was $31 per share. c. Ken received $28,400 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for 20 years, for $238,560. d. Ken received $13,850 in disability benefits for the year. He purchased the disability insurance policy last year. e. Ken decided to go back to school to learn about European history. He received a $840 cash scholarship to attend. He used $470 to pay for his books and tuition, and he applied the rest toward his new car payment. f. Ken's son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike to Ken. Ken received the check on December 30 in the amount of $1,610. g. Ken received a $780 refund of the $3,940 in state income taxes his employer withheld from his pay last year. Ken claimed $12,940 in itemized deductions last year (the standard deduction for a single filer was $12,550). h. Ken received $33,400 of interest from corporate bonds and money market accounts. 1. Determine Ken's gross income. Gross income
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is
retired, he is still very active. Ken reported the following financial information this year. Assume Ken files as a single
taxpayer.
a. Ken won $1,540 in an illegal game of poker (the game was played in Utah, where gambling is illegal).
b. Ken sold 1,340 shares of stock for $32 a share. He inherited the stock two years ago. His tax basis (or investment) in the
stock was $31 per share.
c. Ken received $28,400 from an annuity he purchased eight years ago. He purchased the annuity, to be paid annually for
20 years, for $238,560.
d. Ken received $13,850 in disability benefits for the year. He purchased the disability insurance policy last year.
e. Ken decided to go back to school to learn about European history. He received a $840 cash scholarship to attend. He
used $470 to pay for his books and tuition, and he applied the rest toward his new car payment.
f. Ken's son, Mike, instructed his employer to make half of his final paycheck of the year payable to Ken as a gift from Mike
to Ken. Ken received the check on December 30 in the amount of $1,610.
g. Ken received a $780 refund of the $3,940 in state income taxes his employer withheld from his pay last year. Ken
claimed $12,940 in itemized deductions last year (the standard deduction for a single filer was $12,550).
h. Ken received $33,400 of interest from corporate bonds and money market accounts.
1. Determine Ken's gross income.
Gross income
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