The amount of realizable income for Meredith and Derek in 2020 is $_____. The amount included in Meredith and Derek's gross income for 2020 (i.e. the amount recognizable) is $______.
Meredith Grey and Derek Shepherd had a lot going on in 2020. Working as doctors at Seattle Grace Hospital, the married couple earned $231,000 each in salary. The only other person in their household is one, adopted daughter, Zola Grey Shepherd, age 8.
At the beginning of the year, Meredith’s mother Ellis Grey passed away. From this, Meredith received $250,000 in inheritance and $100,000 from a lump sum payment of life insurance proceeds. Meredith made two different investments with the inheritance and life insurance proceeds. She invested $150,000 of the total $350,000 above in a portfolio of stocks and bonds (none of which were municipal bonds) to save for her and Derek’s future retirement. The portfolio of stocks and bonds increases in value by $15,000 over the year but Meredith and Derrick do not sell any of these investments during the year. Finally, Derek and Meredith received an award worth $25,000 based on medical research they had done during the year. They kept the award money (did not donate it) and used it in 2020 for personal expenditures. It required no additional service. At the end of the year, assume that Derek and Meredith did not have any itemized deductions, credits, or prepayments for the year. Based on the above information, determine the following:
The amount of realizable income for Meredith and Derek in 2020 is $_____.
The amount included in Meredith and Derek's gross income for 2020 (i.e. the amount recognizable) is $______.
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