During 2012, Colin had the following transactions. Salary $ 70,000 Interest inco

Question

During 2012, Colin had the following transactions.

Salary

$ 70,000

Interest income on City of Denver bonds

$500

Damages for personal injury (car accident)

$100,000

Punitive damages (same car accident)

$50,000

Cash dividends from General Motors Corporation stock

$4,000

Based on the information given above, determine Colin's AGI. Be sure to show your work.

Salary

$ 70,000

Interest income on City of Denver bonds

$500

Damages for personal injury (car accident)

$100,000

Punitive damages (same car accident)

$50,000

Cash dividends from General Motors Corporation stock

$4,000

Explanation / Answer

70,000 (salary) + 50,000 (punitive damages) + 4,000 (cash dividends) = $124,000.

The damages from personal injury and the municipal bond interest are non-taxable exclusions

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