Compute the taxable income for 2008 for Irving on the basis ofthe following info
ID: 2770928 • Letter: C
Question
Compute the taxable income for 2008 for Irving on the basis ofthe following information. His filing status is single.
Salary $70,000
Interest income from bonds issued by city of Phoenix 1,800
Alimony paymentsmade 6,000
Contribution to traditionalIRA 5,000
Gift from grandparents 30,000
Capital loss from stockinvestment (5000)
Amount won in football office pool (Sports gambling is againstthe
Law where Irvinglives) 1,500
Number of Dependents (Uncle and aunt who live in anotherstate) 2
Age 46
Explanation / Answer
No tax consequences for receiving a gift....$30000 received isno part of taxes for capital losses only 3000 loss is include in any oneyear. gambling winnings, even theillegal payouts, are taxable. As for the aunt and uncle as long as one provide morethan half of their annual support they can be dependents even whenthey live elsewhere. So we must assume that he met thisrequirement some interest income from city bonds is exempt from state taxbut not federal. :included in taxes : salary, interest, alimony, contributions,capital loss, gambling winnings, dependents. :
Salary 70000 Interestincome 1800 gamblingwinnings 1500 capital lossD (3000) total Income 70300 alimonypaid 6000 contr toIRA 5000 total adjustments 11000 adjusted Grossincome 59300 standarddeduction 5700 deduction fordependents 10950 totaldeductions 16650 taxableincome 42650
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