Tax Misc., Problems



48. In May 2013 Antonio graduated from the UCLA with a degree in accounting and moved to Denver to look for work. Shortly alter arriving in Denver; he obtained work as a staff accountant in a local CPA ?rm. In his move to Denver, Antonio incurred the following costs:

$275 in gasoline.

$250 for renting a truck from UPAYME rentals.

$100 for a tow trailer for his car .

$85 in food.

$25 in double espressos from Starbucks.

$300 for motel lodging on the way to Denver.

$405 for a previous plane trip to Denver to look for an apartment.

$175 in temporary storage costs for his collection of baseball memorabilia

How much, if any, may Antonio take as a moving expense deduction on his 2013 tax return?

Is that deduction subject to any conditions that could change its deductibility in the future?

50. Juan, who is single, is a self-employed carpenter as well as an employee of Frame It, Inc.

His self-employment net ?income is $35,000, and he received a W-2 ?rom Frame It for wages of $25,000. He is covered by his employers pension plan, but his employer does not offer a health plan in which he could participate.

a. Up to how much of his self-employed health insurance premiums could he deduct for this year, if any? Why?

b. How much of Juan’s self-employment taxes would be deductible?


53. Under the terms of a divorce decree executed May 1, 2013, 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?

b. Of that amount, how much is taxable gain or loss that Farah must recognize related to the transfer of the house?


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