Question

The following information applies to Jasmine, who is single, for 2018:

Salary $56,000 Interest income from First Bank of Lexington 1,500 Dividends from Watters Company stock 3,000 Contribution to a traditional IRA 4,000 Loan repayment from her friend 1,000 Capital loss from sale of personal vehicle (2,300) Number of potential dependents ? Age 44

Jasmine maintains a household for her sister, who has $9,000 from Social Security. In addition, Jasmine's aunt lives with her and has income of $3,000.

Click here to access the standard deduction table to use.

Indicate whether the following items are taxable or nontaxable to Jasmine.

Salary Loan repayment from a friend Interest income Dividend income

Identify whether the items are deductible (fully or partially) by Jasmine.

Contribution to a traditional IRA Capital loss from sale of personal vehicle

Jasmine's taxable income in 2018 is $.

Answer 1

1.Answer

Salary ,Interest Income and Dividend income will be taxable but Loan repayment from a friend is not to be consider as income, so it will be not be taxable .

2.Answer

.Contribution to a traditional IRA- 100% deduction can be claim as limit of IRA contribution of 2018 is $5500 and Jasmin has below limit i.e. $4000.

Capital loss from sale of personal vehicle- Deduction cannot be claim as while we'd need to pay tax if we realized a capital gain on the sale of your car, we generally can't deduct any loss arising from the sale of "personal use property". ... This is because if a property depreciates through personal use, the resulting loss on its disposition is a personal expense

Jasmin Taxable income for 2018 is

Income from salary $56,000

Interest income from First Bank of Lexington    $1500

Dividends from Watters Company stock    $3000

Total    $60,500

Less :- Contribution to a traditional IRA    $4000

                Taxable income $56500