Amber & Bryan (both age 45), are married and file a joing tax return. 2017 income includes:

1. Salary of $200,000

2. Amber was in a car accident and received compensatory damages of $25,000 for broken nose.

3. Amber also received punitive damages of $15,000; the person who hit her car was intoxicated

4. interest income from Disney bonds in the amount of $1,000

5. refund of 2016 NJ IncomeTaxes of $2,000 (the couple itemized their deductions in 2016; itemized deductions exceeded the standard deduction by $5,000)

Amber and Bryan also incurred and paid the following expenses during the year:

6. Medical expenses: $7,000

7. Parking tickets $300

8. Alimony (Bryan was previously married and pays Alimony to his ex-wife): $12,000

9. Legal fees associated with divorce proceedings- not tax related: $4,000

10. Charitable contributions- paid on 12/30/17: $2,000

11. Casualty loss (after $100 floor, but before any further limitations) $1,000

12. Mortgage payment on principal residence: principal only: $10,000

13. Mortgage payment on principal residence: interest expense: $14,500

14. Property taxes (real estate taxes) on personal residence: $4,200

15. Nephew, Gerardo, owns a home and could not make his property tax payment as he is unemployed. Amber paid Gerardo's property taxes (real estate taxes): $3,000

16. Federal income tax withheld: $18,000

17. Qualified Moving expenses in conjuction with a new job: $2,000

18. Contribution to a traditional IRA: $4,000

19. Cost of new roof on personal residence: $14,000

20. NJ income tax withheld: $1,300

A. Identify items 1-5 as taxable or not taxable. Identify items 6-20 as a deduction for AGI, deduction from AGI, or not deductible. Give a sentence or two explaining limitations, rules, etc for the following items: 5, 6, 10, 11, 15,19

B. Use the tax formula to provide a detailed calculation of the couple's 2017 taxable income. Be sure to compare the standard deduction amount to total itemized deductions.