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    Compute taxable income for Marjory

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    Compute the taxable income for 2007 for Marjory on the basis of the following information. Marjory is married but has not seen or heard from her husband since 2005.

    Salary $6,000
    Interest on bonds issued by city of Independence (MO) 2,000
    Interest on CD issued by Hivernia National Bank 1,800
    Cash Dividend received on GE common stock 2,300
    Life insurance proceeds paid on death of aunt
    (Marjory was the desgnated beneficiary of the policy) 50,000
    Inheritance received on death of aunt 110,000
    Carlton (a cousin) repaid a loan Marjory made to him
    in 2004 (no interest was provided) 5,000
    Itemized deductions (state income tax, propery tax on
    residence, interst on home mortgage, charitable
    contributions) 7,200
    Number of Dependants (children ages 13 & 15) 2
    Age 40

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    https://brainmass.com/business/accounting/compute-taxable-income-for-marjory-176052

    Solution Preview

    Standard deduction for 2007 for head of household is $7850.
    Personal exemptions are $3400 each.

    Salary - yes
    Tax exempt bonds - no
    CD interest - yes
    GE dividend - yes
    Life insurance ...

    Solution Summary

    Taxable income calculations are shown for Marjory together with a brief explanation of why several items are excluded from the calculations.

    $2.19

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