Question

[The following information applies to the questions displayed below.] This year Jack intends to file a married-joint return. Jack received $177,600 of salary, and paid $7,200 of interest on loans used to pay qualified tuition costs for his dependent daughter, Deb. This year Jack has also paid moving expenses of $5,250 and $28,500 of alimony to his ex-wife, Diane, who divorced him in 2012. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

a. What is Jack's adjusted gross income?

Jack's AGI ____________

Required information

[The following information applies to the questions displayed below.]

This year Jack intends to file a married-joint return. Jack received $177,600 of salary, and paid $7,200 of interest on loans used to pay qualified tuition costs for his dependent daughter, Deb. This year Jack has also paid moving expenses of $5,250 and $28,500 of alimony to his ex-wife, Diane, who divorced him in 2012. (Round your intermediate calculations and final answer to the nearest whole dollar amount.)

b. Suppose that Jack also reported income of $9,700 from a half share of profits from a partnership. Disregard any potential self-employment taxes on this income. What AGI would Jack report under these circumstances?

Jack's AGI __________________

Answer 1

a. Jack modified AGI without adjustment of education loan interest is $143,850 which is less than $170,000 limit so he is allowed to deduct loan interest part maximum is $2,500.

Deductible loan interest is ($2,500 - $2,500 x [($143,850 -$140,000) / $30,000]

= $2,179

Salary & gross income	177,600
Less: Alimony	(28,500)
Moving expense deduction	(5,250)
Modified AGI	143,850
Student loan deduction	(2,179)
AGI	141,671

b. Jack modified AGI without adjustment of education loan interest is $153,550 which is less than $170,000 limit so he is allowed to deduct loan interest part maximum is $2,500.

Deductible loan interest is ($2,500 - $2,500 x [($153,550 -$140,000) / $30,000]

= $1,371

Salary & gross income	177,600
Partnership income	9,700
Less: Alimony	(28,500)
Moving expense deduction	(5,250)
Modified AGI	153,550
Student loan deduction	(1,371)
AGI	152,179