Allison had the following transactions during 2019:
Salary |
$90,000 |
|
Bank loan obtained to pay for car purchase |
30,000 |
|
Interest income on bonds— |
||
Issued by City of Nashville |
$4,000 |
|
Issued by Procter & Gamble Corporation |
5,000 |
9,000 |
Child support received |
6,000 |
|
Capital gain from stock investment, held for 4 months |
3,500 |
|
Alimony received (divorce finalized in 2011) |
5,000 |
|
Inheritance received from Grandpa George |
20,000 |
|
Charitable contributions paid to church |
(5,000) |
What is Allison’s AGI for 2019? Show and label all calculations. For all items you exclude from the calculation, explain why. (8 points)
Answer-Allison's AGI For 2019:-
Particulars | Amount |
Salary | $90,000 |
Add:Interest Income on Bonds by Procter & Gamble Corporation | $5,000 |
Add:Capital gain from stock investment, held for 4 months | $3,500 |
Add: Alimony received | $5,000 |
Gross Income | $103,500 |
Less: Deduction for AGI | $0 |
Allison's AGI for 2019 | $103,500 |
Why not other items included:-
1- Interest Income -Issued by City of Nashville These bonds are tax-free.
2-Child support received It is not taxable as per IRS
3-Inheritance received from Grandpa George It is tax-free
4-Charitable contributions paid to church It is an itemized deduction not required while calculating AGI.
Allison had the following transactions during 2019: Salary $90,000 Bank loan obtained to pay for car...
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