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Paul and Elaine Smith are married. They have two children: John,-(Answered)


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Paul and Elaine Smith are married. They have two children:

John, a son, age 20, who is a full-time college student who

earned $4,000 in wages from part-time work throughout the year;

and a daughter, age 16, who is a high school student.

Paul?s salary for the year was $70,000. Elaine?s salary for

the year was $54,000. In addition to those income items, they

also had the following income items: Interest income on

municipal bonds - $1,200; interest income on certificate of

deposit (Chemical Bank) - $1,600; dividends on 4M (a domestic

publicly traded corporation) stock - $1,400. Additionally,

during the year, they sold 400 shares of Special Electric (SE) a publicly traded corporation. The shares of stock were sold by

the Smiths on August 31, 2015, for $6,000. The Smiths bought 100

shares of stock on July 1, 2014 $1,400 and 600 shares of stock on

August 1, 2014 for $9,000. Also, the Smiths received a state

income tax refund in the amount of $1,200 on

April 30,

2015. The refund was for an overpayment of 2014 state income

taxes. The Smiths filed a Form 1040A for 2014. Finally, Elaine

Smith received alimony of $12,000 during the year.

The Smiths had the following expenditures during the year:

Mortgage interest - $9,600; property taxes on home - $3,200;

property taxes on auto - $600; credit card interest - $350; cash

charitable contributions of $78; and a charitable contribution of

a work of art (a portrait of former Mayor Linseed) worth $5,500

when donated to the Gotham Historical Society. The Smiths bought

the painting five years earlier for $2,000.

Finally, Elaine Smith made and sold sculptures in her spare

time. She did not have a separate bank account for the sculpture

activity and did not advertise the activity. The activity

started six years ago and has never been profitable. The

sculpture activity is conducted in separate studio space that she

owns. During the year, she sold three sculptures for a total of

$1,700. She incurred the following expenses for the sculpting

activity: mortgage interest on studio space - $800; property

taxes on studio space - $500; supplies - $700; and depreciation $400.


Paper#9208836 | Written in 27-Jul-2016

Price : $22