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In: Accounting

B is single and reports the following items of income and deductions for the current year:...

B is single and reports the following items of income and deductions for the current year:
Salary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,000
Net long-term capital gain on sale of investment property. . . . . . . . 200,000
Medical expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,500
Casualty loss. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500
State and local income taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Real estate taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Charitable contributions (all cash). . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Interest on home mortgage. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000
Interest on investment loans (unimproved real property) . . . . . . . . . 10,000
B made the election to treat $10,000 of the net long-term capital gain as investment income. The only additional transaction during the year was the exercise of an incentive stock option of her employer’s stock at an option price of $12,000 when the stock was worth $100,000. Compute B’s tax liability and AMT, if any.

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ekkarill92 answered 1 year ago
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