Camille Sikorski was divorced last year. She currently provides a home for her 1

Question

Camille Sikorski was divorced last year. She currently provides a home for her 15-year-old daughter Kaly. Kaly lived in Camille's home for the entire year, and Camille paid for all the costs of maintaining the home. She received a salary of $92,500 and contributed $5,700 of it to a qualified retirement account (a for AGI deduction). She also received $13,500 of alimony from her former husband. Finally, Camille paid $16,800 of expenditures that qualified as itemized deductions. ume the original facts but now suppose Camille's daughter, Kaly, is 25 years old and a full-time student. Kaly's gross income for ar was $6,800. Kaly provided $4,080 of her own support, and Camille provided $6,800 of support. What is Camille's taxable e? Description Amount Gross income For AGI deductions Adjusted gross income Standard deduction Itemized deductions Taxable income

Explanation / Answer

Taxable Income is 83,500. It's being arrived at as per below:

Gross Income includes salary and the Alimony received (as it's a deduction for the payer and income for the receiver). A person can choose over standard deduction and itemized deduction whichever is higher. SInce standard deduction is 12,000 and itemized deductions are 16,800, we've chosen to take the itemized deductions.

e = c+d

Gross Income    106,000.00 a For AGI Deductions      (5,700.00) b Adjusted Gross Income    100,300.00 c = a+b Standard deduction                     -   Itemized deductions    (16,800.00) d Taxable Income      83,500.00

e = c+d

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