during 2010, Gary earned $57000 as an executive. Gary, who is single, supported

ID: 2386785 • Letter: D

Question

during 2010, Gary earned $57000 as an executive. Gary, who is single, supported his half sister, who lives in a nursing home. Gary received the following interest: $400 on city of Los Angeles bonds, $200 on a money market account, and $2100 on a loan made to his brother. Gary spent one week serving on a jury and received $50. Gary received a refund of federal income taxes withheld during the prior year of $1200 and a state income tax refund of $140. Gary had itemized deductions last year of $8000. Gary received qualified dividends on Ace Corporation of $1400. Gary's itemized deductions equal $9000, and withholding for federal income taxes is $8000. Compute Gary's tax due or refund due for 2010.

Explanation / Answer

Salary

$57,000

Interest on money market account

Interest on loan to brother

Fee for jury duty

State income tax refund

Dividend on Ace stock

Dividend on Tray stock

1,400

Adjusted gross income

Minus: Exemptions ($3,300 x 2

( 6,800)

Itemized deductions

( 9,000)

Taxable income

$46,090

Gross tax

With holding

( 8,000)

Net Tax Refund

$ 294