In: Accounting
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
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
please rate.