Question

• Al and Mary have been married for 10 years and live in New York. Mary works as an accountant and earned $150,000 in salary. They earned interest income in a joint savings account of $300. Also, they have municipal bond interest of $1,000 from the city of Orlando Florida. They sold a vacation home for $95,000. They purchased that property 3 years at a cost of $90,000. In addition, they sold shares of EOX for $45,000. They purchased the shares 5 years ago at $60,000. They are going to file MFJ. What is the amount of their taxable income?

Answer 1

Calculation of taxable income of Al and Mary under MFJ
Particulars	Workings	Amount
Mary's salary Income			$150,000
Interest from joint savings account			$300
Municipal bond interest	Exempt		-
Normal Income			$150,300
Gains of sale of vacation home	95,000-90,000	$5,000
Loss on sale of shares	45,000-60,000	$(15,000)
	Loss on sale of shares after adjustment for gain	$(10,000)
	Capital losses upto $ 3000 to be set off against normal incomes	$3,000
	Balance to be carry forward	$(7,000)
Capital losses upto $ 3,000 to be set off against normal incomes			$(3,000)
Taxable Income			$147,300