Question

QUESTION 2 (15 Points) Hello, my name is Iron Man. Thanks for volunteering to help me with my fans for this year. My business manager says we should start with my Gross Income -- whatever that means. I have had a pretty good year so I am excited to see what my tax return looks like I got a promotion to manager for Thanos Infinity Chips Ine. in January. I earned $78,000 in base salary this year. I get a lot of fringe benefits like all the Infinity Chips I can eat, although I can't really eat a whole lot As part of my manager duties, I get to decide on certain things like contracts for the company. My good buddy, Spiderman runs an advertising and desin company. I made sure that he won the new logo design contract for the new packaging for the Infinity Chaps for this year (even though his offer wasn't quite the best). Spiderman bought me a gift of a new mega mega computer this year for being such a good friend. The computer cost $63,000 Here's another bit of good luck for the year. I purchased a computer case at a local resale store. When I was putting my computer in it I found an envelope with $18,000 inside. What a great day I also like to gamble a lot. I won $13,000 in a Juggernaut tournament in Rawanda this year. I also won about 4,200 over the year tour Friday night Liars Poker games. Unfortunately, I lost $10,000 in the office March Madness Deadpool and another $3.500 om my Limbo la Silly Wir were better than my los Even though it was a pretty good year I did have a few setbacks My Great Uncle, Captain America, died this year. He was my favorite Uncle he was my only uncle). He left me $950,000 m cash and 560.000 worth of stock is his will need some of the cash and beaded put the rest into my As result recen 55,500 in d ende oss the stock, 51600 is interest from the municipal bonds, and $2.500 t from my account i I did be st but of bad this boss e s December 12that they wer e from the company. These me 30.000 vece check on December 15. I decided to hold on to that check and set cash it until year, so I won't have to pay taxes on this year Pretty tu? Ad a ble to collect 53.350 employment Finally, my ex-wife, Pepper till paying memoryShe's a physicist who divorced me in 2013 because I was not working at the time since she was much w p layed a t the ruled that she had to pa Sh 510.000 this . She st ore the Sheet check for 5900 for Christmas this year I forgot to get thing theagh

Answer 1

Solution

Item	Amount	Explaination
Basic salary	$78,000	Base salary forms a part of taxable amount and will be a part of gross income
Computer cost	$63,000	Compuer is part of gift. It is not a part of taxable income and will not be included in income
Envelope	$18,000	Envelope received is a taxable amount and will be under income from other sources.
Juggernaut tournament	$13,000	Any money won or lost by games or gambling or wagering is considered taxable income.
Liars poker game	$4,200	Any money won or lost by games or gambling or wagering is considered taxable income.
Madness deadpool	-$10,000	Any money won or lost by games or gambling or wagering is considered taxable income. Hence, it will be deducted from gross income
Limbo league	-$3,500	Any money won or lost by games or gambling or wagering is considered taxable income. Hence, it will be deducted from gross income
Cash	$9,50,000	Cash is a form of gross income
Stock	$20,000	Stock is a part of gross income
Dividends	$5,500	Dividends form a part of other income which is a part of gross income
Interest on municipal bonds	$1,600	Interest on savings account form a part of other income which is a part of gross income
Interest on savings acount	$2,500	Interest on savings account form a part of other income which is a part of gross income
Severance check	$20,000	Severance pay is a taxable amount. Hence, it formas a part of gross income
Unemployment compensation	$2,550	If you received unemployment compensation during the year, you must include it in gross income
Alimony	$10,000	Alimony is a taxable amount. If you have received amounts, you must include the amount of alimony or separate maintenance you received as income.
Christmas gift	$900	any money given to you as a gift doesn't count as income on your taxes

Hence, Gross income will be :

Basic salary	$78,000
Envelope	$18,000
Juggernaut tournament	$13,000
Liars poker game	$4,200
Madness deadpool	-$10,000
Limbo league	-$3,500
Cash	$9,50,000
Stock	$20,000
Dividends	$5,500
Interest on municipal bonds	$1,600
Interest on savings account	$2,500
Severance check	$20,000
Unemployment compensation	$2,550
Alimony	$10,000

$11,11,850

Hence, Gross income will be $11,11,850