Question

Sean, who is single, received social security benefits of $8,520, dividend income of $12,620, and interest income of $2,130. Except as noted, those income items are reasonably consistent from year to year. At the end of 2018, Sean is considering selling stock that would result in an immediate gain of $10,260, a reduction in future dividends of $1,065, and an increase in future interest income of $1,565. What amount of social security benefits is taxable to Sean?

Retain stock?

Sell Stock?

Answer 1

Given:

Social Security benefits:                $8520

Dividend Income:                            $12620

Interest Income:                              $2130

Capital Gain(sell of stock)             $10260

Reduction in future dividend      $1065

Increase in future interest income           $1565

Social security benefits(if retain stock)
Particulars	Amount (in $)
Social security benefits	8520
dividend income	12620
interest income	2130
total taxable income	23270

Social security benefits(if sell stock)
Particulars	Amount (in $)
Capital Gain	10260
interest income	3695
dividend income	11555
total taxable income	25510