Question

Diana and Ryan Workman were married on January 1 of last year. Diana has an eight-year-old...

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?

Homework Answers

Answer #1

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
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Note: This problem is for the 2018 tax year. Roberta Santos, age 41, is single and...
Note: This problem is for the 2018 tax year. Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6780. Roberta has been divorced from her former husband, Wayne, for three years. She has a son, Jason, who is 17, and a daughter, June, who is 18. Jason's Social Security number is 111-11-1112, and June's is 123-45-6788. Roberta does not want to contribute $3 to the Presidential Election Campaign Fund....
This problem is for the 2018 tax year. Roberta Santos, age 41, is single and lives...
This problem is for the 2018 tax year. Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6780. Roberta has been divorced from her former husband, Wayne, for three years. She has a son, Jason, who is 17, and a daughter, June, who is 18. Jason's Social Security number is 111-11-1112, and June's is 123-45-6788. Roberta does not want to contribute $3 to the Presidential Election Campaign Fund. Roberta,...
Note: This problem is for the 2018 tax year. Roberta Santos, age 41, is single and...
Note: This problem is for the 2018 tax year. Roberta Santos, age 41, is single and lives at 120 Sanborne Avenue, Springfield, IL 60781. Her Social Security number is 123-45-6789. Roberta has been divorced from her former husband, Wayne, for three years. She has a son, Jason, who is 17, and a daughter, June, who is 18. Jason's Social Security number is 111-11-1112, and June's is 123-45-6788. Roberta does not want to contribute $3 to the Presidential Election Campaign Fund....