Question

During 2017, Marvin, divorced since 2014, supports his dependent father who lives in Canada, had the...

During 2017, Marvin, divorced since 2014, supports his dependent father who lives in Canada, had the following transactions:

Salary                                                                       $95,000

Bank loan (proceeds used to buy personal auto) 10,000

Alimony paid                                                              12,000

Child support paid (lives with mother)    6,000

Gift from aunt                                                            20,000

Home Mortgage Interest                                             7,400

Property taxes on residence    1,400

Charitable contributions                                               1,000

Prepare and attach an Excel or Word file (name the file "Exam 1 - Problem 4) to compute Marvin’s:

AGI

Standard deduction or Itemized deduction

Personal and dependent exemptions

Taxable income

Business   Accounting   
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Answer #1
Particulars Amount Amount
Salary 95000
Total income 95000
Deductions to AGI:
Alimony paid 12000
Total deductions 12000
Adjusted gross income 83000
Less: itemized deductions:
Home mortgage interest 7400
Property taxes 1400
Charity 1000
Total 9800
Balance 73200
Less personal exemption 4050
Taxable income 69150

Standard deduction is 6350 for single filing status taxpayers. Since, itemized deductions are more they are considered. Gifts are not part of gross income. Child support is not deductible. Bank loan is not relavant.

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