Reference no: EM133041017

Question - Frank and Dale Cumack are married and filing a joint 2017 income tax return. During 2017, Frank, age 63, was retired from government service and Dale, 55, was employed as a university instructor. In 2017, the Cumacks contributed all of the support to Dale's father, Jacques, an unmarried French citizen and French resident who had no gross income.

For items 1 through 10, enter the amount of income, loss, or adjustment to income that should be reported on page 1 of the Cumacks' 2017 Form 1040-Individual Income Tax Return to arrive at the adjusted gross income for each separate transaction. Enter the amount in the associated cells. Enter all values as positive numbers. If a value is zero, enter a zero (0).

Any information contained in an item is unique to that item and is not to be incorporated in your calculations when answering other items.

1. During 2017, Dale received a $30,000 cash gift from her aunt.

2. Dale contributed $3,500 to her traditional Individual Retirement Account (IRA) on January 15, 2017. In 2017, she earned $60,000 as a university instructor. During 2017, the Cumacks were not active participants in an employer's qualified pension or annuity plan.

3. In 2017, the Cumacks received a $1,000 federal income tax refund.

4. During 2017, Frank, a 50% partner in Diske General Partnership, received a $4,000 guaranteed payment from Diske for services that he rendered to the partnership that year.

5. In 2017, Frank received $10,000 as beneficiary of his deceased brother's life insurance policy.

6. Dale's employer pays 100% of the cost of all employees' group-term life insurance under a qualified plan. Policy cost is $5 per $1,000 of coverage. Dale's group-term life insurance coverage equals $450,000.

7. In 2017, Frank won $5,000 at a casino and had $2,000 in gambling losses.

8. During 2017, the Cumacks received $1,000 interest income associated with a refund of their prior years' federal income tax.

9. In 2017, the Cumacks sold their first and only residence for $400,000. They purchased their home in 1996 for $50,000 and have lived there since then. There were no other capital gains, losses, or capital loss carryovers. The Cumacks do not intend to buy another residence.

10. In 2017, Zeno Corp. declared a stock dividend and Dale received one additional share of Zeno common stock for three shares of Zeno common stock that she held. The stock that Dale received had a fair market value of $9,000. There was no provision to receive cash instead of stock.