Question

3. Which of the following is not deductible FROM AGI? Interest on a home mortgage Charitable contributions State and local income taxes Alimony All of the above are deductible from AGI 4. John is a calendar-year taxpayer whose wife died in August of 2019. His eight year-old son lives with him. During 2019, he had salary income of $47,000, $600 of dividend income, and received $50,000 as the beneficiary on his wife's life insurance policy. He made a $5,000 contribution to his regular IRA and paid $12,500 for state income taxes. He also paid $4,000 in mortgage interest, $14,000 in city property taxes, $300 of credit card interest expense and $400 in job hunting expenses when he tried to change to a new profession in March. (a) What is John's filing status for 2019? (b) Compute John's AGI. Show and label your work. (c) Regardless of your answer to (b) above, assume instead that John's AGI was $50,000, Compute John's taxable income. Show and label your work. (d) Regardless of your answer to (c) above, assume that John's taxable income was $20,000. Compute John's tax liability.

Answer 1

Ans: The correct option for the answer is option E i.e. All of above are not deductible from AGI.

Interest on home mortgage, Charitable contributions, State and local income taxes and alimony are all not deductible from AGI.