Using the following facts, determine Jaron ‘s 2019 taxable
income.
1. In November 2017, when his wife died, Jaron left the CPA
firm he was working for and starred his own practice so he could have more time
to spend ,vith his four children (ages 14, 16, 19, and 24 years old). The three
younger children live at home with their father. Danny, Jaron’s 19-year-old
son, graduated from high school a year ago and is currently working at a local
golf course. Danny earned $17,000 in the current year. Jaron’s oldest daughter,
Laura, is married and lives in town with her husband, Chad. Laura graduated
from college two years ago and now works for a local advertising agency.
2. Jaron rents a small office downtown where he meets with
clients and conduces business. He keeps all his client files and business
records in chis office. In the evening, he uses a converted bedroom in his home
as his office. The following expenses are allocated to his home office (by
square feet):
3.Jaron owns a condominium downtown. He rented it out 270
days during the year. He also allowed Laura and her husband to stay in the home
rent-free for 24 days while they were looking for a home. Fortunatel y, the
condominium was not rented during the rime they needed it. The following items
of annual income and expense relate to the
4.On April 6, Jaron sold a parcel of land he had held for
investment to a real estate development firm for $75,000. He purchased the land
three years earlier from his brother for $70,000. His brother had originally
purchased the land for $74,000.
5. On May 1,Jaron purchased 1,000 shares in Genomics Ltd.
for $10 per share. In December he was forced to sell all 1,000 shares at $8 per
share ro avoid a conflict of interest.
Leave a Reply