Your firm has clients named Danny and Mary. They are married and have two dependent children. They also fully support Mary's mother, who lives with them and has no income. Their 2010 tax and other...

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Your firm has clients named Danny and Mary. They are married and have two dependent children. They also fully support Mary's mother, who lives with them and has no income. Their 2010 tax and other related information is as follows:



  • Total salaries - $110,000

  • Bank account interest income - $3,500

  • Municipal bond interest income - $1,500

  • Danny has part-time consultant income of $7200

  • Rent income - $7,000

  • Rent expenses - $9,000

  • Value of employer-provided medical insurance - $5,500

  • Value of premiums for $50,000 of group term life insurance provided by employer - $500

  • Share of partnership income - $30,000

  • Partnership distribution - $10,000

  • Dividend income from ABC stock - $2,000

  • Loan from Danny's parents - $5,000

  • Gift from Danny's parents - $15,000

  • Total itemized deductions - $16,000


Determine Danny and Mary's taxable income.


Give detailed answers and explanations



Answered Same DayDec 25, 2021

Answer To: Your firm has clients named Danny and Mary. They are married and have two dependent children. They...

David answered on Dec 25 2021
130 Votes
Order id: PPSub270715_310037_1
Statement of Taxable Income for the year 2010
Salaries Income 1
10000
Bank Interest 3500
Business Income 37200
Dividend Income 2000
AGI

152700
Less: Self Employment tax
deduction 509
Itemized Deduction 16000
Exemption (3650*5) 18250
Taxable Income 117941
Notes:
 Municipal bond interest income is tax exempt
 Health insurance provided by employer to employee is not...
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