Question

Catherine Ludlow was divorced last year. She currently owns and provides a home for her 15-year-old daughter. Carmine lived in Catherine’s home for the entire year and Catherine paid for all the costs of maintaining the home. She received a salary of $105,000 and contributed $6,000 of it to a qualified retirement account (a for AGI deduction). She also received $10,000 of alimony from her former husband (pre 2019 divorce decree). Finally, Catherine paid $15,000 of expenditures that qualified as itemized deductions.

What is Catherine’s filing status?

What is Catherine’s taxable income?

Part 2

Assume the original facts but now suppose that Catherine’s daughter, Carmine, is 25 years old and a full-time student. Carmine’s gross income for the year was $5,000. Carmine provided $3,000 of her own support and Catherine provided $5,000 of support.

What is Catherine’s filing status?

What is Catherine’s taxable income?

USE 2018 TAX RATE SCEDULE!!!!!!!!

Answer 1

Part1. A. Computation of taxable Income of Camille based on 2018 Tax year rates: Gross Income=$1,05,000 Less: Contributed to AGI = ($6000) Add: Alimony received =$10000 Adjusted Gross Income= $109000 Less: (Standardized Deductions= ($9,250) or Itemized deductions (15000) whichever is higher) = 15000

Less: personal and dependency exemptions=12000

Therefore,catherine's taxable income= $82000

Part2:

. Computation of taxable Income of Camille based on 2018 Tax year rates: Gross Income=$1,05,000 Less: Contributed to AGI = ($6000) Add: Alimony received =$10000 Adjusted Gross Income= $109000 Less: (Standardized Deductions= ($9,250) or Itemized deductions (15000) whichever is higher) = 15000

Less: personal and dependency exemptions=8000(camrine provided $3000 of her support and catherine provided $5000 of support)

Therefore, taxable income= $86000