80.2K

Verified Solution

Link Copied!

Daniel, age 38, is single and has the following income and expenses in 2020: Salary income Net rent income $159,000 13,500 Dividend income 1,300 18,000 Payment of alimony (divorce finalized in March 2019) Mortgage interest on residence Property tax on residence Contribution to traditional IRA (assume the amount is fully deductible) Contribution to United Church Loss on the sale of real estate (held for investment) 5,700 3,000 2,100 2,900 2,075 Medical expenses 4,250 State income tax Federal income tax 1,500 6,500 Daniel's standard deduction for 2020 is $12,400. a. Classify the following expenses as either "Deductible for AGI", "Deductible from AGI", or "Not deductible". Payment of alimony (divorce finalized in March 2019) Mortgage interest on residence Property tax on residence Contribution to traditional IRA (assume the amount is fully deductible) Contribution to United Church Loss on the sale of real estate (held for investment) Medical expenses Loss on the sale of real estate (held for investment) 2,075 Medical expenses 4,250 State income tax 1,500 Federal income tax 6,500 Daniel's standard deduction for 2020 is $12,400 a. Classify the following expenses as either "Deductible for AGI", "Deductible from AGI", or "Not deductible Payment of alimony (divorce finalized in March 2019) Mortgage interest on residence Property tax on residence Contribution to traditional IRA (assume the amount is fully deductible) Contribution to United Church Loss on the sale of real estate (held for investment) Medical expenses State income tax Federal income tax What is Daniel's gross income and his AG Gross income: AGI: S using the standard deduction itemizing his deductions b. Should Daniel itemize his deductions from AGL or take the standard deduction? Because Daniel's total itemized deductions (after any limitations) are he would benefit from

Answer & Explanation Solved by verified expert

See Answer