Question

Bernie is a former executive who is retired. This year Bernie received $185,000 in corporate bond interest and $17,700 of social security payments. What amount must Bernie include in his gross income?

Multiple Choice

• $202,700

• $185,000

• $0

• $193,850

• $200,045

Answer 1

Ref	Particulars	Amount
	MAGI plus 50% of SS:
	MAGI	185,000
50%SS	Add: 50% of SS	8,850
	Total	193,850
	Less: base amount	25,000
a	First excess	218,850
b	Less: second base	(12,000)
	Second excess	206,850
c	Smaller of two a,b	12,000
d	50% of c	6,000
e	Smaller of d and 50%SS	6,000
f	× 85% of second excess	175,823
g	Add e,f	181,823
h	85% of SS	15,045
min(g,h)	Taxable benefits	15,045
	Tax exempt	2,655
	Interest	185,000
	Add: taxable benefits	15,045
	Gross income	200,045

Answer is $200,045

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