Chapter 4, Problem 2DC2

Summary Introduction

Case summary:

Mr. & Mrs. G a middle-aged couple with two children, Mr. R, age 13, and Mr. S, age 11 whom they adopted this year. They have an extensive retirement portfolio invested primarily in growth-oriented mutual funds. Their annual investment income is only $500, none of which is attributable to capital gains. Mr. A works in the banking industry and receives an annual income of $32,500.while Mrs. A, who owns the only travel agency in town, makes about $40,000 a year. The G’s family gives extensively to charities.

Character in the case:

Mr. A and Mrs. A

Adequate information:

Investment income is $500.

Moving expenses are $3,000.

Health insurance expenses are $2,200.

To determine:

The G’s total income and adjusted gross income for the year.