Compute the taxable income from 2011 for Mattie on the basis of the following in

Question

Compute the taxable income from 2011 for Mattie on the basis of the following information. Mattie is married but has not seen or heard from her husband since 2009.
Salary: $70,000
Interest on bonds issued by AT&T Corporation: $3,000
Interest on CD issued by Wells Fargo Bank: $2,000
Cash dividend received on Chevron common stock: $2,200
Life insurance proceeds paid on death of aunt (Mattie was the designated beneficiary of the policy): $100,000
Inheritance received on the death of aunt: $200,000
Casey (a cousin) repaid a loan Mattie made to him in 2007 (no interest was provided for): $5,000
Itemized deductions (state income tax, property taxes on residence, interest on home mortgage, charitable contributions): $10,200
Number of dependents (children, ages 17 and 18; mother-in-law, age 60): 3
Age: 40

Explanation / Answer

Life insurance proceeds, inheritance , and loan repayment are not taxable. Taxable income: 70,000 Salary +5,000 interest income +2,200 dividend income -10,000 itemized deductions -14,800 four exemptions, 3700 each =$52,200

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