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Daniel B. Butler and Freida C. Butler, husband and wife, fil

    Daniel B. Butler and Freida C. Butler, husband and wife, file a joint return. The Butlers live at 625 Oak Street Corbin, KY 40701. Dan’s social security number is 111-11-1111, and Freida’s is 123-45-6789. Dan was born on 1/15/63 and Freida was born on 8/20/1964.  During 2014, Dan and Freida furnished over half of the total support of each of the following individuals, all of whom still live at home:  a. Gina, their daughter, age 22, a full-time student, who married on December 21, 2014, has no income of her own and for 2014 did not file a joint return with her husband, Casey, who earned $10,600 during 2014. Gina’s social security number is 123-45-6788.  b. Sam, their son, age 20, who had gross income of $6,300 in 2014, dropped out of college in October 2014. He had graduated from high school in May 2014. Sam’s social security number is 123-45-6787.  c. Ben, their oldest son, age 26, is a full-time graduate student with gross income of $5,200. Ben’s social security number is 12304506786.Dan was employed as a manager at WJJJ, Inc. (employer ID number is 11-111), 604 Franklin Street, Corbin KY 40702), and Freida was employed as a sales-person for Corbin Realty, Inc. (employer ID number is 98-7654321, 899 Central Street, Corbin, KY 40701). Selected Information from the W-2 forms provided by the employers is presented below. Dan and Freida use the cash method.Line  Description  Dan  Freida1  Wages, tips, other compensation  $74,000  $86,0002  Federal Income tax withheld  $11,000  $12,40017  State income tax withheld  $2,960  $3,440Freida sold a house on 12/30/2014 and will be paid a commission of $3,100 (not included in the $86,000 reported on the W-2) on the January 10, 2015 closing date.Other income (as reported on 1099 Forms) for 2014 consisted of the following:Dividends on CSX stock (qualified)  $4,200Interest on savings at Second Bank  1,600Interest on City of Corbin bonds  900Interest on First Bank CD  382The $382 from First Bank was original issue discount. Dan and Freida collected $16,000 on the First Bank CD that matured on September 30, 2014. The CD was purchased on October 1, 2012, for $14,995, and the yield to maturity was 3.3%Dan received a schedule K-1 from the Falcon partnership, which showed his distributive share of income as $7,000. In addition to the above, Dan and Freida’s itemized deductions included the following:Paid on 2014 Kentucky income tax  $700Personal property tax paid  600Real estate taxes paid  1,800Interest on home mortgage (Corbin S&L) 4,900Cash contributions to the Boy Scouts  800Sales tax from the sales tax table is $1,860. Dan and Freida made Federal estimated tax payments of $8,000. The Kentucky income tax rate is 4%.Tax Computation:Compute Dan and Freida’s 2014 Federal income tax payable (or refund due).Using tax forms for your computations you will need 1040 and schedules A,B, and E.

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