Question

Molly is single and earns $150,000 in wages as a lawyer. Her employer withheld $30,000. She is also an equal co-owner in a real estate management partnership with her friend Issa. The partnership earned $8,000 this year. The following also occurred this year:

• Molly purchased a stock last year for $28,000 and sold the stock this year for $22,000. During this year and before the sale of the stock, the stock paid Molly $200 in dividends.
• Molly’s bank paid her a 1% interest rate on her $10,000 of savings.
• Molly earned $500 from a Fairfax County bond issuance.

What is Molly’s gross income?

Using 2020 tax rate bracket

Answer 1

CALCULATION OF GROSS INCOME OF MOLLY

           

1. INCOME FROM WAGES   

    WAGES                                                                   -    $ 150000

    LESS : WAGES PAID TO EMPLOYER                  -   $   30000

  GROSS WAGE                                                                              (A) -   $ 120000

2. INCOME FROM PARTNERSHIP BUSINSES

      TOTAL INCOME FROM PARTNERSHIP BUSINSES - $8000

     MOLLY SHARE = 50% (EQUAL CO OWNER)          - $4000

   GROSS INCOME FROM PARTNERSHIP BUSINESS (B)     -   $    4000

3. INCOME FROM DIVIDENT (C )     -   $   200

4. LOSS OF SOLD STOCKS

      PURCHASE VALUE                $ 280000

      LESS : SALE   VALUE              $ 220000

     LOSS ON SALE STOCK              $ 6000

   LOSS OF SOLD STOCKS                                                             (D)    - $ 6000

5. INTREST ON SAVING BANK DEPOSITS ($10000$1%) (E)         -$ 100

6 . INCOME FROM FAIRFAX COUNTRY BOND (F)       - $ 500

GROSS INCOME=(A)+(B)+(C)+(E)+(F) - (D) = $118800