Instructions : Please provide 2-3 sentence brief explanation and choose the best
ID: 2564269 • Letter: I
Question
Instructions : Please provide 2-3 sentence brief explanation and choose the best multiple choice answer. All sources must be noted. SHOW ALL WORK.
____ 13. In 2016, Tim, aged 45, a calendar year cash basis taxpayer, has the following transactions in 2016:
Salary from job
$70,000
Alimony paid to ex-wife
$6,000
Medical expenses
6,000
Home mortgage nterest
$8,000
IRA Contribution
$7,000
Based on this information, Jim has:
a.
AGI of $55,500.
b.
AGI of $57,000.
c.
AGI of $60,000.
d.
Deduction for medical expenses of $150.
e.
None of the above.
Salary from job
$70,000
Alimony paid to ex-wife
$6,000
Medical expenses
6,000
Home mortgage nterest
$8,000
IRA Contribution
$7,000
Explanation / Answer
answer is option B AGI of $57000
gross income 70000
deductions for AGI:
Alimony paid to ex-wife 6000
IRA Contribution 7000 13000
AGI 57000