Question

Camille Sikorski was divorced in 2017. She currently provides a home for her 15-year-old daughter Kaly. Kaly lived in Camille’s home for the entire year, and Camille paid for all the costs of maintaining the home. She received a salary of $105,000 and contributed $6,300 of it to a qualified retirement account (a for AGI deduction). She also received $16,000 of alimony from her former husband (per divorce decree issued in 2017). Finally, Camille paid $17,300 of expenditures that qualified as itemized deductions. (Use the tax rate schedules and 2019 rules.)

What is Camille's taxable income?

What would Camille’s taxable income be if she incurred $12,800 of itemized deductions instead of $17,300?

Assume the original facts but now suppose Camille’s daughter, Kaly, is 25 years old and a full-time student. Kaly’s gross income for the year was $7,300. Kaly provided $4,380 of her own support, and Camille provided $7,300 of support. What is Camille’s taxable income?

Answer 1

a.)	Filling Status- Head of household	Amount in $
	Salary	105,000
	Add: Alimony received	16,000
	Gross Income	121,000
	Less: Contributed to qualified retirement account	6,300
	Adjusted Gross Income	114,700
	Less: Higher of standard or Itemized deduction	18,350	( 18,350 or 17,300 )
	Taxable Income	96,350
b.)	Filling Status- Head of household	Amount in $
	Salary	105,000
	Add: Alimony received	16,000
	Gross Income	121,000
	Less: Contributed to qualified retirement account	6,300
	Adjusted Gross Income	114,700
	Less: Higher of standard or Itemized deduction	18,350	( 18,350 or 12,800 )
	Taxable Income	96,350
c.)		Amount in $
	Salary	105,000
	Add: Alimony received	16,000
	Gross Income	121,000
	Less: Contributed to qualified retirement account	6,300
	Adjusted Gross Income	114,700
	Less: Higher of standard or Itemized deduction	17,300	( 12,200 or 17,300 )
	Taxable Income	97,400
	Kaly provide 60% (4,380 /7,300 ) of own support, hence Camille can not claim kaly as dependent on tax return. Camille will allowed standard deduction as available to single.