Question

Camille Sikorski was divorced in 2017. She currently provides a home for her 15-year-old daughter Kaly. Kaly lived in Camille’s home for the entire year, and Camille paid for all the costs of maintaining the home. She received a salary of $100,000 and contributed $6,100 of it to a qualified retirement account (a for AGI deduction). She also received $15,000 of alimony from her former husband (per divorce decree issued in 2017). Finally, Camille paid $17,100 of expenditures that qualified as itemized deductions. (Use the tax rate schedules and 2019 rules.)

a. What is Camille’s taxable income?

b. What would Camille’s taxable income be if she incurred $12,500 of itemized deductions instead of $17,100?

c. Assume the original facts but now suppose Camille’s daughter, Kaly, is 25 years old and a full-time student. Kaly’s gross income for the year was $7,100. Kaly provided $4,260 of her own support, and Camille provided $7,100 of support. What is Camille’s taxable income?

Answer 1

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Answer is highlighted in yellow: As per Tax rule: 2019 Solution: Particulars Gross Income (100000+15000) For AGI deduction Adjusted Gross Income Standard Deduction Itemized Deduction Greater of standard deductions or itemized deductions Taxable income (108900-18350) Year 2019 115000 6100 108900 18350 17100 18350 90550 a) b) Particulars Gross Income (100000+15000) For AGI deduction Adjusted Gross Income Standard Deduction Itemized Deduction Greater of standard deductions or itemized deductions Taxable income (108900-18350) Year 2019 115000 6100 108900 $ 18,350 $ 12,500 $ 18,350 $ 90,550 Particulars Gross Income (105000+10000) For AGI deduction Adjusted Gross Income Standard Deduction Itemized Deduction Greater of standard deductions or itemized deductions Taxable Income (108900-17100) Year 2019 115000 6100 108900 12200 17100 17100 91800