Question
Cecil is a 64 year old widower (his wife died 10 years earlier). His income for 2021 is as follows: Pension from former employer $39,850
Cecil is a 64 year old widower (his wife died 10 years earlier). His income for 2021 is as follows:
Pension from former employer $39,850
Interest income from Alto National Bank $5,500
Interest Income from City of Alto Bonds $4,500
Dividends from IBM stock $2,000
Amounts received from Annuity Contracts $5,400
Social Security benefits $14,000
Net Rental Income from townhouse $1,750
Other Information:
1) The cost of the annuity was $46,800. Cecil started receiving monthly payments of $450 when he was 63.
2) Assume Cecil includes the maximum amount of Social Security benefits in his income.
3) Cecil won a washing machine in an internet contest. The current fair market value of the washing machine is $10,000.
4) Cecils 40-year old daughter, Sarah, borrowed $60,000 from him on January 2, 2021. She used the money to start a new business. Cecil does not charge her interest, because she cant afford to pay it, but he does expect to get repaid eventually. Sarahs income from investments during the year are $1,600. The fed funds rate during 2021 was 6%.
What is Cecils gross income for 2021?
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