Question

Required information [The following information applies to the questions displayed below. Camille Sikorski was divorced in 2018. 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. Camille received a salary of $105,000 and contributed $6,000 of it to a qualified retirement account (a for AGI deduction). She also received $10,000 of alimony from her former husband (per divorce decree issued in 2018). Finally, Camille paid $15,000 of expenditures that qualified as itemized deductions. (Use the tax rate schedules and 2020 rules.) 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 $5,000. Kaly provided $3,000 of her own support, and Camille provided $5,000 of support. What is Camille's taxable income? Description Amount (1) Gross income (2) For AGI deductions (3) Adjusted gross income (4) Standard deduction (5) Itemized deductions $ 0 (6) Taxable income

Answer 1

SOLUTION

CAMILLE TAXABLE INCOME

TITLES AMOUNT

1.Gross income $115000 (salary + alimony)

2.for AGI deduction $6000

3.adjusted gross income $109000 (gross income - AGI deduction)

4.standard deduction $18650 (2020 tax rules)

5.itemized deductions $15000

6.greater of standard deduction or

itemized deduction   $18650

7.taxable income $90350

SOLUTION OF C

TITLES AMOUNT

1.Gross income $115000 (salary + alimony)

2.for AGI deduction $6000

3.adjusted gross income $109000 (gross income - AGI deduction)

4.standard deduction $12400

5.itemized deductions $15000

6.greater of standard deduction or

itemized deduction $15000

7.taxable income $94000