Accountancy 503 September 22

Submit your answers in an Excel spreadsheet by midnight on September 28.

Part1

Ivette received Social Security benefits during the current year of $15,400. Ivettes only other sources of income were wages of $16,000, interest income from corporate bonds of $4,000, and taxable domestic dividends of 1,100. Ivette is single, 72-years of age, and has no dependents.

1. Calculate Ivettes AGI.
2. What would be Ivettes AGI if Ivette also had tax-free municipal bond interest income of $9,600.

Part2

Sebastian had a rather good year in 2020. Sebastian is unmarried and provides over one-half of the support for his 39-year-old roommate who legally lives in the home for the entire year. Sebastian had the following for 2020:

Salary $61,744

Interest income 8,875

Rental income 22,350

Rental expenses 12,350

QBI deduction from AGI 2,000

Standard deduction 12,400

Itemized deductions 13,700

Calculate Sebastians adjusted gross income, taxable income, and net income tax before prepayments.