Please help me answer the second part: Info: During 2017, Kelsey, a 40-year-old

Question

Please help me answer the second part:

Info:

During 2017, Kelsey, a 40-year-old single taxpayer, reports the following items of income and expense EEB Click the icon to view the data.) (Click the icon to view the standard deduction and personal and dependency exemption amounts.) Requirement Assuming all of these items are deductible and that the amounts are before any limitations, what is Kelsey's taxable income for the year? Select the labels and calculate Kelsey's adjusted gross income, then calculate his taxable income. (For accounts with zero balances, select the label and enter a "O Use a minus sign or parentheses for expenses and/or losses. Round any applicable AGI floors to the nearest whole dollar.) Income Salary Dividends Interest income Net rental income (expense) Loss on sale of stock Alimony Adjusted gross income Minus: Itemized deductions Medical Real property taxes- principal residence Charitable contributions Mortgage interest - principal residence Casualty loss Miscellaneous itemized deductions Total itemized deductions Personal exemption Taxable income 110,000 1,100 1,100 1,400 (1,900) 10,400 101,300 4050

Explanation / Answer

Medical expenses: only medical expenses over 10% of AGI of are deductible. For taxpayers age 65 and older, only medical expenses over 7.5% of AGI of are deductible through 2017.(7500 < 10130– therefore no medical deductions are allowed)

Casualty losses: only casualty losses in excess of 10% of AGI are deductible. [6,300 < 10130 – therefore no casualty loss deductions are allowed]

Miscellaneous itemized deductions: only miscellaneous itemized deductions in excess of 2% of AGI are deductible. (1,300 < 2,026– therefore no misc. itemized deductions are allowed)

Income : Salary 110000 Dividends 1100 Interest income 1100 Net rental income (expense) 1400 Loss on sale of stock (1900) Alimony (10400) Adjusted gross income 101,300 Minus: itemized deductions Medical 0 Real property taxes - principal residence (4100) Charitable contributions (3600) Mortgage interest - principal residence (7100) Casualty loss 0 Miscellaneous itemized deductions 0 Total itemized deductions 14800 Personal exemption 4050 Taxable income 82450

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