3. Identify each of the following items as either part of taxable income or an e

Question

3. Identify each of the following items as either part of taxable income or an exclusion, adjustment, or an allowable itemized deduction from taxable income for Brian Collins and Morgan Smithfield, a married couple from San Diego, who have two children plus Brian’s child from his first marriage: (.5 pts each) 1. Brian earns $85,000 per year. 2. Brian receives a $13,000 bonus from his employer. 3. Morgan receives $64,000 in commissions from her work. 4. Brian receives $800 in monthly child support from his ex-wife. 5. Brian receives $600 each month in alimony. 6. Brian contributes $4,500 to his retirement account. 7. Morgan inherits a car from her aunt that has a fair market value of $13,000. 8. Morgan sells the car and donates $1,500 to her aunt's church. 9. Brian receives a $5,300 gift from his mother. ?

Explanation / Answer

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No Particulars Amount Nature 1 Brian earns 85000 Taxable income 2 Bonus 13000 Taxable income 3 Commission 64000 Taxable income 4 Child support 9600 Exclusion 5 Alimony 7200 Taxable income 6 IRA 4500 Adjustment 7 Inheritance 13000 Exclusion 8 Charity 1500 Itemized deduction 9 Gift 5300 Exclusion

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