Carmin Kovach is single and has two children from her previous marriage. Anika,
9, lives with Carmin. Julius, 11, lives with his father, Ray. Carmin pays alimony of
$400 per month to Ray. The payments are to continue until Julius reaches age 18,
when they will be reduced to $100.
Carmin is 34 and employed as a nuclear engineer with Atom Systems Consultants,
Inc. (ASCI). Her annual salary is $80,000, and ASCI has an extensive fringe
benefits program for its employees.
ASCI has a qualified pension plan that covers all employees. Under the plan,
ASCI matches any contribution to the plan up to 8% of the employeeAc€?cs annual salary.
Carmin makes the maximum allowable contribution of $6,400, and it is
matched by ASCI.
ASCI provides medical coverage to all employees but not to their dependents.
CarminAc€?cs medical coverage costs ASCI $3,000 during the current year. She
receives $980 in reimbursements for her medical costs. ASCI also provides employees
with a flexible benefits plan. Carmin pays $2,500 into the plan. She uses
$2,400 to purchase medical coverage for Anika. Her medical, dental, and optometry
costs not covered by insurance total $1,900; the flexible benefits plan reimburses
her $100 for these costs.
ASCI also provides employees with group term life insurance of twice their annual
salary, up to a maximum coverage of $150,000. CarminAc€?cs group term life insurance
premiums cost $400. Because of the sensitive and sometimes dangerous
nature of her work, ASCI also provides Carmin with a $300,000 whole life insurance
policy. The whole life insurance policy costs $490.
Taking advantage of ASCIAc€?cs educational assistance program, during the fall
Carmin enrolls in two law school classes at a local university. ASCI pays her tuition,
fees, books, and other course-related costs totaling $2,300.
Carmin also receives certain other fringe benefits not available to all employees.
She receives free parking in the companyAc€?cs security garage that would normally
cost $280 per month. In addition, ASCI pays the $1,000 cost of her nuclear engineerAc€?cs
license and $600 per year in professional association dues and professional
magazine subscriptions. ASCI also pays CarminAc€?cs $900 dues to a health club that is
located in the same building as her office.
Carmin routinely enters sweepstakes contests. This year, she is notified that
she has won $5,000 in a breakfast cereal promotion. The prize is to be paid equally
over 10 years. She receives the first payment December 28, although she doesnAc€?ct
deposit the check in her checking account until January 3.
In February, CarminAc€?cs father dies. Social Security pays her $600 as a survivorAc€?cs
benefit. She also receives stock valued at $30,000 and her fatherAc€?cs house, which
has a value of $90,000, as her share of her fatherAc€?cs estate.
Carmin rents out her fatherAc€?cs house on August 1. The monthly rent is $400,
and the lease agreement is for one year. The lease requires the tenant to pay the first
and last monthsAc€?c rent and a $400 security deposit. The security deposit is to be
returned at the end of the lease if the property is in good condition. On August 1,
Carmin receives $1,200 from the tenant per the terms of the lease agreement. In
November, the plumbing freezes and several lines burst. The tenant has the repairs
made and pays the $300 bill. In December, he reduces his rental payment to $100
to compensate for the plumbing repairs. Carmin pays other deductible costs for the
rental that total $2,680. The allowable depreciation on the rental house is $1,080.
Carmin owns several other investments. She receives the following amounts
(all in cash) from the stocks and bonds she owns:
General Dynamics common stock $ 300
City of Toronto bonds 1,600
State of Nebraska bonds 400
New Jersey economic development bonds 300
Grubstake Mining Development stock 1,000
Carmin owns 1,000 shares of Grubstake Mining Development common stock.
Grubstake is organized as an S corporation and has 100,000 shares outstanding.
Grubstake reports taxable income of $200,000 during the current year.
Carmin sells the following securities during 2013:
Security Sale Date
Nebraska Bonds 3/14/13 10/22/10 $1,900 $ 80 $1,710
10/18/13 2/19/13 $8,900 $450 $9,630
Carmin purchased 500 shares of General Dynamics stock on July 22, 2010, at
a cost of $2,200. On June 15, 2013, she receives 50 shares of General Dynamics
stock as a dividend. The fair market value of General Dynamics stock on June 15,
2013, was $3.50 per share.
Carmin slips on a wet spot in front of a computer store during the current
year. She breaks her ankle and is unable to work for two weeks. She incurs $1,300
in medical costs, all of which are paid by the owner of the store. The store also
gives her $1,000 for pain and suffering resulting from the injury. ASCI continues
to pay her salary during the two weeks she misses because of the accident. ASCIAc€?cs
plan also pays her $1,200 in disability pay for the time she is unable to work.
Calculate CarminAc€?cs adjusted gross income on her 2013 tax return. Then do
one or both of the following, according to your professorAc€?cs instructions:
a. Include a brief explanation of how you determined each item that affected
adjusted gross income and any items you excluded from gross income. Your
solution to the problem should contain a list of each item included in adjusted
gross income and its amount, with the explanations attached.
Charlie consumes apples and bananas. His utility function is UXAXBxAx2B. The price of apples is $1 the price of bananas is $2, and his income is $30 per week. If the pric...Dec 13 2019
12 b. i) ExpJain Emitter stabilized bias circuit. (10)ii) A voltage divider bias circuit of FET has Ri=910KQ, R2=110KQ,Apr 07 2020
Assume you want to test the EMH by comparing alternative trading rules to a buy- and-hold policy. Discuss the three common mistakes that can bias the results against the EMH. >May 15 2020
Weekly sales of copy paper at Cubicle Suppliers are provided in the table below. Compute a three-period moving average and a four-period moving average for weeks 5, 6, an...Aug 22 2020
Save An Suppose that you place $450 in a bank account each year for the next 20 years. How much would be in your bank account at the end of the twentieth year if the depo...Aug 16 2020
In the United States, monetary policy is determined byA) the Federal Reserve.B) the president.C) private citizens.D) the Treasury Department.32) The peak in U.S. governme...Jan 11 2020
Here is the questions for this week. I need it by Sunday 1/27/2013 at 11 p.m. Let me know if you are interested.2-1: Your organization collects data on individual patient...Apr 29 2020
it was estimated that the total value of all corn-production subsidies in the United States totaled about $4 billion. The population of the United States was approximatel...Dec 05 2019
How do I uninstall Meteoroids?Apr 28 2020
A horizontal axle AB, 1 m long, is pivoted at the mid point C. It carries a weight of 20 N at A and awheel weighing 50 N at B. The wheel is made to spin at a speed of 600...May 13 2020