Question

Lane is single and has two dependents. Financial records show the following items in the current...

Lane is single and has two dependents. Financial records show the following items in the current year:

Gift from a friend $12,000

Dividends received on stock $1,200

Prize won in state lottery $1,000

Salary from employer $35,000

Child support received from ex-spouse $6,000

Alimony received from ex-spouse $12,000

Long-term capital loss $5,000

How much is Lane’ adjusted gross income for the current year?

            $43,200

$44,200
$46,200
$48,200
Business   Operations-Management   
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Answer #1

The gift from a friend and the child support received from ex-spouse is not includible in the adjusted gross income.

Dividends received on stock = $1,200

Prize won in state lottery = $1,000

Salary from employer = $35,000

Alimony received from ex-spouse = $12,000

Long-term capital loss = $5,000 (The maximum long term captial loss is limited to only $3000 for the year)

The adjusted gross income for the current year = Dividends received on stock + Prize won in state lottery + Salary from employer + Alimony received from ex-spouse - Long-term capital loss

= 1200 + 1000 + 35000 + 12000 - 3000

= $46,200

Hence the correct answer is option C.

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