Question

u Olly Sulemus 1 a 1 di un 15. Lyle and Louise are retired living on income from their investments and Social Security benefits. During the current year, they receive the following: I. Cash dividends on stock investments $28,000 II. Interest on municipal bonds 5,000 III. Social Security benefits 18,000 Lyle and Louise's adjusted gross income is: a) $28,000 b) $33,000 e) $37,000 d) $48.000 e) $41,300 Print Layout View Pages: 3 of 16 Words: 949 of 5419 140% 99 09 22 36 OFI

Answer 1

Adjusted gross income is $28,000. Option A is correct

Adjusted gross profit is the income earned from wages, dividend on Investment, retirement or other sources other than social security benefits and nontaxable interest from municipal bonds.

Adjusted gross profit = $28,000

Nontaxable interest and social security benefits are used in calculation of combined income.

Combined income = gross income + nontaxable interest + half of social security benefits

= 28,000 + 5,000 + (18,000/2)

= 42,000

​​​​​