Question

Camille Sikorski was divorced last year. She currently owns and provides a home for her 15-year-old daughter, Kaly, and 18-year-old son, Parker. Both children 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 $65,000 and contributed $4,600 of it to a qualified retirement account (a for AGI deduction). She also received $8,000 of alimony from her former husband. Finally, Camille paid $3,100 of expenditures that qualified as itemized deductions.

Comprehensive Problem 4-55 Part-a

a. What is Camille’s taxable income?

Gross Income

for AGI deduction

adjusted gross income

itemized deduction

personal and dependency deduction

total deduction from AGI

Taxable income

    

Answer 1

	Computation of Camille’s taxable income. Year 2018
	Salary	$       65,000
	Alimony	$         8,000
a	Gross Income	$       73,000
b	For AGI deductions	$         4,600
c	Adjusted gross income	$       68,400
	Standard Deduction	$       18,000
d	Itemized deduction	$         3,100
	Greater of standard deduction and itemized deduction	$       18,000
e	Personal and dependency deduction	$               -
f	Total deduction from AGI	$       18,000
g	Taxable income	$       50,400
	NOTE:
	From 2018, Personal and dependency deduction is eliminated and the standard deduction is doubled
	Assumption: The year is assumed as 2018. For 2019, the Standard deduction is $18,350