Question

Answer the following questions:

12.) Joyce and Melvin have been married for 30 years.In 2014 they received $ 22,000 of Social Security benefits and has $ 12,000 of interest income.What portion of the Social Security benefit is taxable?

a.)$0
b.)$6,000
c.)$10,200
d.)$11,500


13.) Emile is single and received $ 28,000 of dividend income during the year.He also received $ 18,000 of Social Security benefits.What portion of his Social Security benefits are taxable?

a.)$0
b.)$7,050
c.)$9,000
d.)$15,300


14.) Antonine immigrated from Italy last century, became a citizen and has worked the better part of his life in the United States, for which he is truly thankful. His full retirement age normal retirement age for social security benefits is age 66 ,but after a hard life working he wants to retire at age 63 and travel throughout America and back to his homeland. If his benefit at age 66 is $ 1,000 per month, how much will he receive in Social Security retirement benefits if he begins receiving benefits at age 63?

a.)$700.00
b.)$800.00
c.)$812.50
d.)$1,000.00 the same benefit,he will simply not receive it for as long.


17.) Kathryn taught at Fun Acedemic,University for 25 years and is filing for Social Security retirement benefits this year,when she turns 72.Her PIA is $ 1,000 per month as adjusted for inflation.How much in benefits will she receive assuming her full retirement age was 60?

a.)$1,320
b.)$1,360
c.)$1,480
d.)$1,587


20.) Which of the following are correct?

a.)Surviving spouses are entitled to 100 percent of the workers benefit amounts after the worker dies.
b.)Divorced spouses can also claim benefits based on their ex-spouse record if they were married 8 years or longer.
c.)For someone to delay benefits until age 70 based solely on payback or breakeven,the person would have to live to at least age 92,without considering the time value of money.
d.)All of the above are false


chapter 12:

7.) Mary Jane received 1000 NQSOs with an excersize price of $ 25 per share when the stock was $ 25 on the market.Two years from the date of grant Mary Jane excercises when the stock price is $102.At exercise,Mary Jane:

a.)Has W-2 income of $ 25,000
b.)Has an AMT adjustment of $77,000
c.)Has W-2 income of $ 77,000
d.)Has an AMT adjustment of $ 25,000


10.) Arnia the CEo of the produces Inc was awarded the following stock options from the producers Inc.

Option       Grant Date       Type       Exercise price       FMV       # of shares
1                1/1/2012            NQSO            $15                  $15            1,000
2                1/1/2014            NQSO            $25                  $25            1,000


During 2014 Arnia had the following transactions regarding the above option.


Option       Date            Action          # of options (O)/Shares(S)       Market price on date
1             2/1/2014      excercised               1,000(O)                                        $27
1             2/1/2014          sold                      1,000(S)                                        $27
2            12/12/2014    excercised               1,000(O)                                        $36

Which of the following is correct?

a.)Arnia has $ 11,000 of W-2 income and a $ 12,000
capital gain.
b.)Arnia has $ 23,000 of W-2 income
c.)Arnia has capital gain of $12,000
d.)Arnia has $ 66,000 of W-2 income


11.) Mike was awarded 1,000 shares of restricted stock of B corp at a time when the stock price was $ 14.Assume Mike properly makes an 83(b) election at the date of the award.
The stock vests 2 years later at a price of $ 12 and Mike sells it then.What are Mike’s tax consequences in the year of sale?

a.)Mike has a W-2 income of $ 12,000
b.)Mike has a long term capital loss of $ 2,000
c.)Mike has W-2 income of $ 14,000
d.)Mike has a $ 12,000 long term capital gain.


13.) in 2014 Chip an accomplished professional race car driver is to receive a signing bonus for agreeing to drive for Hot-Lap international a racing team.Hot lap agrees to establish a NQDC agreement with Chip to defer the bonus beyond Chip’s peak income producing years.Hot Lap transfers the bonuses to an escrow agent,subject to the risk of forfeiture to team creditors in bankruptcy who invests the funds in securities acting as a hedge against inflation.The bonus is deferred until 2015 and is then paid to Chip in years 2015-2024.When is the income deductible by the employer and includible by chip?

option       Employer deduction       Employee inclusion
A                            2014                               2014
B                            2015                               2015
C                      2015-2024                           2015
D                      2015-2024                      2015-2024


15.) Jennifer received 1000 SAR’s att $ 22 the current trading price of clippers inc ,her employer.If Jennifer excercises the SAR three years after the grant and clipper’s stock is $ 34 per share,which of the following is true?

a.)Jennifer will have an adjusted basis of $ 22,000 in the clippers inc Stock
b.)Jennifer will have W -2 income equal to $ 12,000
c.)Jennifier will have long term capital gain of $ 12,000
d.)Jennifier will have ordinary income equal to $ 22,000

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12.) Joyce and Melvin have been married for 30 years.In 2014 they received $ 22,000 of Social Security benefits and has $ 12,000 of interest income.What portion of the Social Security benefit is taxable?

Answer a)

Since their combined income (12,000 + 0.5 * 22000) is less than 32,000, no taxes....

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