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During the current year, Donna, a single taxpayer (divorced in 2019), reports the following items of...

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.)

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solution-

particulars Amount $
salary $86000
bank account interest 2300
net short term capital loss( 3000-7000=4000 limited) (3000)
Alimony 24000
rental income $6500
less: rental expenses
repairs (2400)
taxes (700)
depreciation (1200)
net rental income 2200
AGI 111500
medical expenses$2500-(AGI$111500x7.5%) -0-
interest on personal residence 8000
real estate taxes on residence 1000
casualty loss($4400-AGI$111500x10%) -0-
total itemises deduction (9000)
personal exemption (3400)
taxable income $99100

ekkarill92 answered 2 years ago
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