Compute the taxable income for 2012 for Andrea on the basis of the following inf

Question

Compute the taxable income for 2012 for Andrea on the basis of the following information. Her filing status is single. Salary $90,000 Interest income from bonds issued by IBM 3,000 Alimony payments received 3,600 Contribution to traditional IRA 5,000 Gift from grandparents 30,000 Short-term capital gain from stock investment 3,000 Amount lost in football office pool (sports gambling is against the law where Andrea lives) 1,500 Number of potential dependents (two cousins, who live in Canada) ? Age 40

Explanation / Answer

Total deductions = 3000 + 3600 + 5000 + 30000 +(1500*2) = 44,600 (Gambling losses are indeed tax deductible, but only to the extent of your winnings. This requires you to report all the money you win as taxable income on your return. However, the deduction for your losses is only available if you are eligible to itemize your deductions. If you claim the standard deduction, then you can't reduce your tax by your gambling losses.Hence Amount lost in football office pool does not contribute to the deduction) Taxable income = 90,000 ? Total deductions Taxable income = 90,000 ? 44600 Taxable income = 45,400 Do rate the answers bro! cheers!

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