COMPREHENSIVE TAX RETURN PROBLEM

question 6

Essay

COMPREHENSIVE TAX RETURN PROBLEM. Your cousin, Antonia, who is 30 years old, single and a restaurant manager, heard that you have enrolled in the Masters of Taxation program at State University. She has asked you for help in preparing her 2014 tax return and provides you with the following information: [3] Antonia borrowed $12,000 and used the proceeds to purchase a new car. [4] The original cost of the clothes were $480 and the current FMV is $200 [5] Of the $888 in expenses, $180 are for meals and entertainment. Compute Antonia's: adjusted gross income, taxable income, and tax liability.

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Definitions:

Benchmark

A standard or point of reference against which things may be compared or assessed, often used in finance to measure the performance of investments.

Hedge Fund

An investment fund that employs diversified strategies to achieve high returns, including leverage, derivatives, and short selling.

Local Currency

The currency that is legally accepted in a particular country or jurisdiction, used for the settlement of financial transactions within its borders.

S&P 500

A U.S. stock market index reflecting the market value of 500 major companies with common stock on the NYSE or NASDAQ.