Given the following data, calculate the adjusted gross income (AGI) for David Br
ID: 2756417 • Letter: G
Question
Given the following data, calculate the adjusted gross income (AGI) for David Brown's family. What are their total itemized deductions? How many personal exemptions do they receive, and how much does that save them in taxes if each exemption is worth $3,650 and they are in the 15 % marginal tax bracket? David is married and has two dependent children. Show all work for full credit. Make sure you account for each piece of data given.
W-2 Wages $50,000
Mortgage Interest Paid 6,500
Dividends Received 500
Long-Term Capital Gains 2,000
Long-Term Capital (Loss) 500
Interest Income 50
State Tax Refund 300
Deductible IRA Contribution 5,000
Property Taxes Paid 1,200
Rental Prop. Passive Income 2,500
Charitable Contributions 5,000
Medical Expenses 4,500
Alimony Paid to Ex Wife 4,000
Unreimbursed Employee
Misc. Expenses 900
Explanation / Answer
Answer:
Wages $50000
Income:
Dividend received $500
Long term capital gain $2000
Interest income $50
Rental Income $2500
Total $ 55050
Minus: Exclusions NIL
Gross Income $55050
Minus: Deductions for AGI:
IRA Contribution $5,000
Adjusted Gross Income $50050
Minus: Deductions
Itemized Deductions-
State tax refund $300
Charitable contributions $5000
Medical expenses $4500
Alimony Paid to ex-wife $4000
Misc Expenses $900
Total Itemized deduction $ 14700
Personal exemptions
Property tax paid $1200
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