Question

This year Jack intends to file a married-joint return. Jack received $178,800 of salary and paid $7,050 of interest on loans used to pay qualified tuition costs for his dependent daughter, Deb. This year Jack has also paid moving expenses of $7,400 and $31,200 of alimony to his ex-wife, Diane, who divorced him in 2012. (Round your intermediate calculations and final answer to the nearest whole dollar amount.) b. Suppose that Jack also reported income of $11,300 from a half share of profits from a partnership. Disregard any potential self-employment taxes on this income. a). What is Jack's adjusted gross income? b)What AGI would Jack report under these circumstances? Using the 2020 tax year.

Answer 1

A).Jack's AGI

Particulars	Amount In$
Salary and gross Income	1,78,800
Alimony	-31,200
Moving Expense Deduction	-7,400
Modified AGI	1,40,200
Student Loan Deduction	2,483
AGI	1,37,717

Student loan deduction

= Maximum deduction before phase out- phase out Amount

= $2,500 - {2500*(140,200-140,000)/30,000}

= $2,500 - $17

= $2,483

B). Jack's AGI (Under Revised Situation)

Particulars	Amount In$
Salary and gross Income	1,78,800
partnership Income	11,300
Alimony	-31,200
Moving Expense Deduction	-7,400
Modified AGI	1,51,500
Student Loan Deduction	1,542
AGI	1,49,958

Student loan deduction

= Maximum deduction before phase out- phase out Amount

= $2,500 - {2500*(151,500-140,000)/30,000}

= $2,500 - $958

= $1,542