Under the terms of a divorce decree executed May 1, 2014, Ahmed transferred a house worth $650,000 to his ex-wife, Farah, and was to make alimony payments of $3,000 per month. The property has a tax basis to Ahmed of $300,000.
a. How much of this must be reported on Farah’s tax return?
Answer: $
b. Of that amount, how much is taxable gain or loss that Farah must recognize related to the transfer of the house?
Answer: $
Juan, who is single, is a self-employed carpenter and is also an employee of Frame It, Inc. His self-employment net income is $35,000, and he received a W-2 from Frame It for wages of $25,000. He is covered by his employer’s pension plan, but his employer does not offer a health plan in which he could participate.
a. Up to how much, as a percentage of his self-employed health insurance premiums, could Juan deduct for this year, if any? Why?
Answer as a Percentage:
Reason WHY?:
b. How much of Juan’s self-employment taxes would be deductible?
Answer as a Percentage:
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