Question

During the current year, Donna, a single taxpayer (divorced in 2019), reports the following items of income and expenses:

Income:

      Salary                                                                         $86,000

      Municipal bond interest                                                1,300

      Bank account interest                                                    2,300

      Alimony received                                                        24,000

      Capital gain on an asset held less than one year           3,000

      Rental income from residential rental house              12,500

Expenses/losses:

      Interest on principal residence                                      8,000

      Real estate taxes on principal residence                       1,000

      Capital loss on an asset held less than one year           7,000

      Expenses related to rental property

            Mortgage interest                                                    6,000

            Repairs                                                                    2,400

            Taxes                                                                          700

            Depreciation                                                            1,200

Compute Donna's taxable income. (Show all calculations in good form.)

Answer 1

ANSWER:

Particulars	Amt. in $	Amt. in $
Salary		86,000
Bank Account interest		2,300
Net short term capital loss	(3000-7000)	-4,000
Alimony		24,000
Renal Income	12,500
Less: Rental expenses
Mortgage interest	-6,000
Repairs	-2,400
Taxes	-700
Depreciation	-1,200
Net rental income		2,200
AGI		1,10,500
Item deduction:
Interest on principal residence	-8,000
Real estate taxes on residence	-1,000
Total itemized deduction		-9,000
Taxable income		1,01,500