Question

Assignment 6 – Computing AGI

Michael and Sabrina are married and have three children, Amara, Bryan, and Skyla. They live at 120 Main Street, Flushing NY 11425. Michael is a law professor, working at BMCC – CUNY. Sabrina is currently unemployed. The following is a list of information for Michael and Sabrina Brown for the tax year 2019.

• Michael wages – 80,000
• Interest from Chase savings account – 500
• Interest from NYS municipal bonds - 250
• Rental income – 25,000
• Rental operating expenses – 20,000
• Capital losses – 5,000
• Gambling winnings – 2,000
• Gambling losses – 2,200
• Roth IRA contributions – 8,000
• Educational expenses incurred my Michael – 350
• Self-employed taxes (from rental net income) – 1,000
• Itemized deductions – 25,000
• Michael and Sabrina are ages 65, and 55 respectively.

Instructions: Calculate the Brown’s AGI. Show all computations to get full credit.

Answer 1

Calculation of Brown's Adjusted Gross Income for tax year 2019
Particulars	Amount
Income:-
Wages	80,000.00
Interest from Chase savings account	500.00
Interest from NYS municipal bonds (exempt)	-
Capital Loss	-5,000.00
Rental Income net of operating expenses (25000-20000)	5,000.00
Gambling lncome net of gambling losses (2000-2200)	-
Total of Income (A)	80,500.00
Deductions:-
Roth IRA contributions (not tax deductable)	-
Educational Expenses (subject to max of 250)	250.00
Self Employment Taxes	1,000.00
Itemized deductions	25,000.00
Total of Deductions	26,250.00
Adjusted Gross Income (A-B)	54,250.00