Problem 2-10 points Mary (age 42 is a California resident & provides 100% of the

Question

Problem 2-10 points Mary (age 42 is a California resident & provides 100% of the support for her daughter Amy (age 3). In 2016, Mary had the following transactions: Salary income from DML, LLP Alimony income from ex husband Child support payments from her ex husband v Unemployment compensation from State of California Paid California income taxes Paid childcare expenses 250,000 14,000 14,000 7,000 (S,000) (3,500) A What is Mary's adjusted gross income for the year? B What is Mary's taxable income for the year? C What is Mary's net tax liability for the year? (ignore AMT) D How would 2018 tax law changes impact her taxable income?

Explanation / Answer

a) Mary's Adjusted Gross Income for the year

Particulars $ Amount

Add Salary Income From DML 250,000

Add alimony from Ex Husband 14,000

Add Unemployment compensation 7,000

from state of california

Less: Child Care Expenses (3,500)

Adjusted gross income = $267,500

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