Diana and Ryan Workman were married on January 1 of last year. Diana has an eight-year-old son, Jorge, from her previous marriage. Ryan works as a computer programmer at Datafile Inc. Diana is a full-time student and is not employed. The Workmans reported the following financial information pertaining to their activities during the current year.
a. Ryan earned a $96,000 salary for the year.
b. Diana received a scholarship of $10,000. She used $8,000 to cover tuition costs and the remaining $2,000 went towards living expenses.
c. Diana won a $1,000 cash prize at her church-sponsored Bingo game.
d. The Workmans received $500 of interest from corporate bonds and $250 of interest from a municipal bond.
e. The couple bought 50 shares of ABC Inc. stock for $40 per share on July 2. The stock was worth $47 a share on December 31.
f. Diana’s father passed away on April 14. She inherited cash of $50,000 from her father and his baseball card collection, valued at $2,000. As the beneficiary of her father’s life insurance policy, Diana also received $150,000.
Assuming the Workman's file a joint return, what is there gross income for the current year?
Workmans Gross Income computed as follows
Description | Amount | Explaination |
Salary | $96,000 | |
Scholarship | $2000 | 2000 used towards living expenses does not qualify for exclusion.8000 used for tution may be excluded |
Cash Prize | $1000 | Incuded in Gross income even if received from charitable organisation |
Interest | $500 | 500 from corporate bonds included in gross income and 250 inerest from municipal bonds is excluded from gross income. |
Share Appreciation | - | Stock appreciation is not realised so it is not included in gross income |
Inheritance | - | Inheritance and life insurance proceeds excluded from gross income |
Total Gross Income | $99,500 |
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