Ma 1. Amanda is in her 70s, is in good health, and lives in a large house in a rural area. Amanda asks Bridget, the granddaughter of a close friend, to live in the house with her. Amanda does not need nursing care, but wants someone for companionship and to help with housework and repairs. Amanda promises to transfer the house to Bridget if she will live with her for five years. Bridget does so and continues to work full-time in a nearby town. Amanda transfers title in the house to Bridget. What are the gift tax consequences, if any, to Amanda?
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Ma 1.
Amanda is in her 70s, is in good health, and lives in a large house in a rural
area. Amanda asks Bridget, the granddaughter of a close friend, to live in the
house with her. Amanda does not need nursing care, but wants someone for
companionship and to help with housework and repairs. Amanda promises to
transfer the house to Bridget if she will live with her for five years. Bridget
does so and continues to work full-time in a nearby town. Amanda transfers title
in the house to Bridget. What are the gift tax consequences, if any, to Amanda?
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- Ashley Panda lives at 1310 Meadow Lane, Wayne, OH 43466, and her Social Security number is 123-45-6777. Ashley is single and has a 20-year-old son, Bill. His Social Security number is 111-11-1112. Bill lives with Ashley, and she fully supports him. Bill spent 2018 traveling in Europe and was not a college student. He had gross income of 4,655 in 2018. Bill paid 4,000 of lodging expenses that Ashley reimbursed after they were fully documented. Ashley paid the 4,000 to Bill using a check from her sole proprietorship. That amount is not included in the items listed below. Ashley had substantial health problems during 2018, and many of her expenses were not reimbursed by her health insurance. Ashley owns Panda Enterprises, LLC (98-7654321), a data processing service that she operates as a sole proprietorship. Her business is located at 456 Hill Street, Wayne, OH 43466. The business activity code is 514210. Her 2018 Form 1040, Schedule C for Panda Enterprises shows revenues of 315,000, office expenses of 66,759, employee salary of 63,000, employee payroll taxes of 4,820, business meal expenses (before the 50% reduction) of 22,000, and rent expense of 34,000. The rent expense includes payments related to renting an office (30,000) and payments related to renting various equipment (4,000). There is no depreciation because all depreciable equipment owned has been fully depreciated in previous years. No fringe benefits are provided to the employee. Ashley personally purchases health insurance on herself and Bill. The premiums are 23,000 per year. Ashley has an extensive stock portfolio and has prepared the following analysis: Note: Ashley received a Form 1099B from her stockbroker that included the adjusted basis and sales proceeds for each of her stock transactions. The per-share cost includes commissions, and the per-share selling price is net of commissions. Also, the dividends are the actual dividends received in 2018, and these are both ordinary dividends and qualified dividends. Ashley had 800 of interest income from State of Ohio bonds and 600 of interest income on her Wayne Savings Bank account. She paid 25,000 of alimony to her former husband. His Social Security number is 123-45-6788. Ashley itemizes her deductions and provides the following information, which may be relevant to her return: Ashley made a 26,000 estimated Federal income tax payment, does not want any of her taxes to finance presidential elections, has no foreign bank accounts or trusts, and wants any refund to be applied against her 2019 taxes. Compute Ashleys net tax payable or refund due for 2018. If you use tax forms for your computations, you will need Form 1040 and its Schedules 1, 4, 5, A, C, D, and SE and Form 8949. Ashley qualifies for the 199A deduction for qualified business income. Be sure to include that in your calculations. Suggested software: ProConnect Tax Online.Krista and Landor are new parents. They have a two-month-old baby girl and they are considering expanding their family in the future. They have purchased life insurance with a child coverage rider in the amount of $5,000. Unfortunately, their baby girl becomes gravely ill and passes away. How will the insurer deal with their death claim relating to the child coverage rider? Select one: a. b. The insurer will pay the claim for the full amount. The insurer will pay a claim for only half of the full amount to keep the child coverage rider in force for the next child. c. The insurer will deny the claim as Krista and Landon did not purchase accidental death insurance for their3. Ralph and Sybil own a home in Memphis, which is insured by a standard homeowners policy. They also rent a beach house in Destin on an annual basis. Rodney, their insurance agent, suggests that they consider increasing the limit on personal property at the beach house, because the standard homeowners policy provides a limit of only_of the personal property limit on their primary residence. a. 25 percent b.10 percent. c.15 percent d. 5 percent
- Your clients Aiden, 35, and Delora, 37, have had many life changes in the past year. Aiden secured a new job and a large raise. They welcomed their second child and now have two children under four years old. To accommodate the baby, they renovated and refinanced their existing mortgage. Delora will be a stay at home mom and no longer has group insurance coverage through her employer. They meet with you to discuss how these changes might impact their needs for insurance. Which of the following statements concerning Aiden and Delora's insurance needs is correct? a) The newborn child is a minor and will be covered under the existing coverage. b) Their insurance needs should not consider Delora since she is no longer earning an income under her stay at home mom status. c) The mortgage was refinanced and the bank would be responsible for providing mortgage insurance. d) Aiden may need additional coverage if his new employer offers less group life insurance than his previous…Velma, a 59-year-old minority woman who works as a teacher, contacts you about getting a loan to purchase a condominium. As you’re chatting, she indicates that she’s hoping to retire from teaching in three years. You take her financial and personal information and see that you should be able to get her the amount she needs to purchase the home and now you need to discuss terms. You share some loan options with her and she insists that she’s only interested in an adjustable-rate mortgage because she wants the lower monthly payments to start and is convinced the interest rates will stay low or go down even further. 1. What should you share with Velma about an ARM loan given her situation? Are you obligated to help her apply for the loan she wants?Mark and parveen are the parents of three young children. Mark is a store manger in a local supermarket. His gross salary is 75,000 per year. Parveen is a full time stay at home mom. Use the easy method to estimate the family’s life insurance needs.
- What kind of obligation are the following? 1.1. Rosalie agreed to pay her tuition fee in five monthly installments. 1.2. Gino promised to give Rhino a puppy husky four months from now. 1.3. Ivy is buying a pair of headlights for her car but requested that she will buy one piece at a time because her money is insufficient for both pieces. 1.4. The parents donated a farm lot to their children Josie, Jojo, and Joey. 1.5. The teacher opted for “blended” teaching where she can meet students face to face for 10 hours and give them e-learning materials for 40 hours.Daniel and Esther, a married couple in their fifties, meet with Gunther, their insurance agent, to discuss Daniel's insurance needs. Daniel states that, among other assets, he would like Esther to receive a rental property that he purchased several years ago for $500, 000. The property is currently worth $1, 300, 000. If Daniel's tax rate is 40%, how much insurance would he need to purchase to cover the taxes payable on the property upon his death? Select one correct answer from the list 1. So 2. $160,000 3. $260,000 4. $320,000 ΟΟΟSamuel Finley has two children, a daughter Lee and a son Keaton. Samuel has a lovely beach house in Palm Beach. Sam is terminally ill and has been told by his doctors that he has less than a year to live. Lee knows that Keaton is their father’s favourite child and that he had been named in the latter’s will to inherit the beach house. Lee knew that since their father did not have long to live and that he was 90 years old and starting to become mentally-weak, she could pressure him to transfer the Palm Beach beach house over to her even though Samuel may not totally understand what he was signing over. So, for four months, using pressure and threats, but more often with gentle but devious tactics, Lee succeeds in convincing Samuel to sign a transfer of property transferring the Palm Beach beach house over to her. As his last act, before he dies, Samuel wants to set aside the transfer of the beach house to Lee. Advise him of his legal position. (Use IRAC method)
- Hi, my name is Titus. I am having trouble answering this question. Could you help me out? Life Insurance Needs for a Young Married Couple. Amy and Mack Holly from Rapid City, South Dakota, have been married for three years. They recently bought a home costing $212,000 using a $190,000 mortgage. They have no other debts. Mack earns $62,000 per year, and Amy earns $71,000. Each has a retirement plan valued at approximately $20,000. They recently received an offer in the mail from their mortgage lender for a mortgage life insurance policy of $190,000. Their only life insurance currently is a $20,000 cash-value survivorship joint life policy. They each would like to provide the other with support for at least five years if one of them should die. What amount of coverage should they get? ExplainSolve through IRAC (ISSUE, Rules, Analysis, Conclusion) method. Samuel Finley has two children, a daughter Lee and a son Keaton. Samuel has a lovely beach house in Palm Beach. Sam is terminally ill and has been told by his doctors that he has less than a year to live. Lee knows that Keaton is their father’s favourite child and that he had been named in the latter’s will to inherit the beach house. Lee knew that since their father did not have long to live and that he was 90 years old and starting to become mentally-weak, she could pressure him to transfer the Palm Beach beach house over to her even though Samuel may not totally understand what he was signing over. So, for four months, using pressure and threats, but more often with gentle but devious tactics, Lee succeeds in convincing Samuel to sign a transfer of property transferring the Palm Beach beach house over to her. As his last act, before he dies, Samuel wants to set aside the transfer of the beach house to Lee. Advise…Amount of Insurance Needed. Peter is married and has two children. He wants to be sure that he has sufficient life insurance to take care of his family if he dies. Peter's wife is a homemaker but attends college part-time pursuing a law degree. It will cost approximately $40,000 for her to finish her education. Because the children are teenagers, Peter feels he will only need to provide the family with income for the next ten years. He further calculates that the household expenses run approximately $61,600 per year excluding the mortgage payments. The balance on the home mortgage is $ 125,000. Peter set up a college fund for his children when they were babies, and it currently contains sufficient funds for them to attend college. Assuming that Peter's wife can invest the insurance proceeds at 9%, calculate the amount of insurance Peter needs to purchase. The amount of life insurance Peter would need to purchase is?