Sandy, age 40, is blind. She has one dependent child who lives with her and rece
ID: 2415423 • Letter: S
Question
Sandy, age 40, is blind. She has one dependent child who lives with her and received the following amounts this year.
Insurance proceeds from the death of her grandfather
$ 10,000
Child support payments from her ex-spouse
15,000
Salary
45,000
Court awards for the crash that made her blind. None of the payments were punitive.
100,000
Interest income from her bank
6,000
Interest income from city of Dallas bonds
3,000
Required:
Calculate Sandy’s taxable income.
Calculate Sandy’s tax liability.
Please use tax table for 2015,
Insurance proceeds from the death of her grandfather
$ 10,000
Child support payments from her ex-spouse
15,000
Salary
45,000
Court awards for the crash that made her blind. None of the payments were punitive.
100,000
Interest income from her bank
6,000
Interest income from city of Dallas bonds
3,000
Explanation / Answer
Sandy's taxable income = insurance proceeds from grandfather's death + salary + interest income from bank + interest income from city of dallas bonds
= 10000 + 45000 + 6000 + 3000
= 64000
Tax liability for Sandy = Taxable income - standard deduction for disacle individuals
= 64000 - 6300 = $57700
Tax liability = 5156.25 + 25% of (57700 - 37450)
= $10218.75
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