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Sandy, age 40, is blind. She has one dependent child who lives with her and rece

ID: 2427395 • Letter: S

Question

Sandy, age 40, is blind. She has one dependent child who lives with her and received the following amounts this year.

Insurance proceeds from the death of her grandfather

$ 10,000

Child support payments from her ex-spouse

15,000

Salary

45,000

Court awards for the crash that made her blind. None of the payments were punitive.

100,000

Interest income from her bank

6,000

Interest income from city of Dallas bonds

3,000

            Required:

Calculate Sandy’s taxable income.

Calculate Sandy’s tax liability.

Insurance proceeds from the death of her grandfather

$ 10,000

Child support payments from her ex-spouse

15,000

Salary

45,000

Court awards for the crash that made her blind. None of the payments were punitive.

100,000

Interest income from her bank

6,000

Interest income from city of Dallas bonds

3,000

Explanation / Answer

All amount in $ Total Income Taxable Income Excempt Income Insurance proceeds from the death of her grandfather                      10,000            10,000 Child support payments from her ex-spouse                      15,000            15,000 Salary                      45,000        45,000 Court awards for the crash that made her blind. None of the payments were punitive.                   1,00,000        1,00,000 Interest income from her bank                        6,000           6,000 Interest income from city of Dallas bonds                        3,000           3,000                          1,79,000        54,000        1,25,000

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