I. Calculate the taxable income for Daniella and Dermot Davis based on the following information for 2021 Married Joint filing status Salary $100,000 Sole proprietorship income $400,000 Dermot won $5,000 in fantasy Football The Davis contributed $10,000 to Unicef Child support received $20,000 Contribution to Health Savings Account $2,000 US Treasury bill interest $40,000 Dermot found a diamond bracelet on the beach the fair market value of the bracelet was $20,000. Dividends received $60,000 Daniella won $1,000 in a pie bake off Workmans Compensation $20,000 Dermot won $10,000 in settlement of a business law suit. IRA contribution $3,000 Daniellas mother gifted her $40,000 in cash. Long Term Capital Gain $80,000 State and local taxes paid $10,000. Real estate taxes paid $15,000 Penalty for early withdrawal from timed savings account. $1,000 Mortgage interest paid $70,000 the $1,400,000 mortgage was signed in 2014 Medical expenses $32,000. Daniella gave $5,000 to the Jones family who lost their home. Unemployment Compensation $40,000 Daniellas sister Dana repaid a $20,000 loan from 2012. Self- employment tax paid $7,000 Sales tax paid $5,000 Dermot was the beneficiary of his late great grandfathers life insurance policy. He received $100,000.

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