2020 Tax Return Problem

John smith, age 35, married Sally, age 31, during 2020. John pays alimony of $1,000 a month under a divorce decree from 2016, and provides $7,200 a year in support for his son from a pervious marriage. The son lives with John's ex-wife, who provides $3,000 a year in support. During 2020, John earned $45,000 and Sally earned $38,000 at her regular job. John and Sally paid $4,800 state income taxes, $3,800 property taxes on their home, $15,000 charitable contributions, $8,400 interest on their home mortgage, and $3,000 medical expenses. IN addition, they had the following transactions during 2020:

a) John sold for $34,000 property which he had received from his father. his father's basis in the property at the time of the gift was $35,000 and the fair market value was $30,000.

b) John sold his personal use automobile (adjusted basis of $25,000) for $15,000 and purchased a new car for $28,500.

c) Sally received #300 in dividends from the 50 shares of $10 par Webster Corp. common stock which she owns. The stock has a adjusted basis of $1,400 to Sally and was purchased on April 28,2020. On july 19,2020, she also received 50 nontaxable stock rights with a fair market value of $5 when the fair market value of the stock was $30 per share. Five rights plus $20 entitle her to one share of common stock. On October 24,2020, she exercised 30 of the rights and sole the other 20 for $100.

d) John and Sally purchased 50 shares of Waverly Corp. stock for $35 a share on April 18, 2020. ON May 19,2020, they purchased 30 more shares for $45 each and on June 16,2020, they purchased 20 shares for $50 each. On August 11,2020, they sold 75 shares for $4,500.

Compute John and Sally's taxable income. Treat any gain as ordinary income.

*can you please include notes/formulas in order to take good notes*