Austin, a single individual with a salary of $100,00, had additional income as f
ID: 2380848 • Letter: A
Question
Austin, a single individual with a salary of $100,00, had additional income as follows: Austin's employer provied him with lunch at a weekly meeting every friday; the meeting was held at his office. The value of the lunches is $1,000 for the year.
Austin also incurred and paid the following expenses durning 2012:
Medical expense $ 5,000
alimony 24,000
charitalbe 2,000
casualty loss ( after $100 floor) 1,000
mortgage interest on personal residence 4,500
property taxes on personal residence 4,200
moving expense 2,500
contribution to a traditional IRA 4,000
Sales taxes ( no state or local income tax is imposed) 1,300
1) in the $1,000 for meals taxable? why or why not?
2) Identify each expense as for AGI, from AGI, or not deductible
3) using the tax formula, provide a detailed calculation of Austin's taxable income. Your answermust use the tax formula!
Explanation / Answer
Arnold deduction for AGI is $26500and consists of the following items: Alimony payments Moving expenses
Deduction for AGI $24,000+ 2500 =$26500
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