Question 1. Juanita, single and age 43, had the following items for 2014:

1. Juanita, single and age 43, had the following items for 2014:

Compute Juanita’s taxable income for 2014.

2. While Susan was on vacation during the current year, someone broke into her home and stole the following items:

· A computer used 60% in connection with Susan’s employment as an employee and 40% for her personal use. The cost of the computer was $8,000. Depreciation of $3,000 had been taken on the computer and it had a fair market value of $4,000 at the time of the theft.

· A painting, which Susan purchased as an investment for $10,000, had a fair market value of $17,000.

· Silverware purchased for $3,000 had a fair market value of $5,000.

∙ Cash of $30,000.

Susan’s adjusted gross income, before considering any of the above items, is $60,000. Determine the total amount of Susan’s itemized deductions resulting from the theft.

3. Neal, single and age 37, has the following items for 2014:

Salary $50,000

Casualty loss on business property (8,000)

Casualty loss on rental property (5,000)

Personal casualty gains 3,000

Personal casualty losses (after $100 floor) (12,000)

Interest expense on personal residence (7,000)

Determine Neal’s taxable income for 2014.

4. Gary, who is an employee of Red Corporation, has the following items for 2014:

5. Susan has the following items for 2014:

· Loss on rental property caused by termites—$110,000. Insurance covered 80% of the loss.

· Loss on personal use automobile—$10,000. The insurance policy does not cover the first $3,000 of loss. Susan decided not to file a claim for the loss.

· Loss on a painting stolen from Susan’s house. Susan purchased the painting three years ago as an investment. She paid $40,000 for the painting and it was worth $35,000 at the time of the theft. The painting was insured for the fair market value.

· Salary—$40,000.

Determine Susan’s AGI and total amount of itemized deductions for 2014.

6. Roger, an individual, owns a proprietorship called Green Thing. For the year 2014, Roger has the following items:

· Business income—$200,000.

· Business expense—$150,000.

· Loss on a completely destroyed business machine. The machine had an adjusted basis of $25,000 and a fair market value of $20,000.

· Loss on a business truck. The truck had an adjusted basis of $8,000. The repairs to fix the truck cost $10,000.

Determine Roger’s adjusted gross income for 2014.

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