Your neighbor earned wages of $86,400, won $350,000 on a television game show, and contributed $50,000 to a tax-deferred savings plan. She is entitled to a personal exemption of $3800 and a standard deduction of $5950. The interest on her home mortgage was $9200 and she contributed $95,000 to charity. Base the taxable income on the greater of a standard deduction or an itemized deduction. Find the gross income.Find the adjusted gross income. Find the taxable income.

Income tax payable is an obligation by the tax payer to the government on the taxable income.

Answered: Your neighbor earned wages of $86,400,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Your neighbor earned wages of $86,400, won $350,000 on a television game show, and contributed $50,000 to a tax-deferred savings plan. She is entitled to a personal exemption of $3800 and a standard deduction of $5950. The interest on her home mortgage was $9200 and she contributed $95,000 to charity. Base the taxable income on the greater of a standard deduction or an itemized deduction.

Find the gross income.
Find the adjusted gross income.
Find the taxable income.

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