Question
Paul and Paula (married filing jointly) engaged in the following transactions during 2021. Determine their total AGI. LABEL EACH ITEM. 1. Paul works at ABC,
Paul and Paula (married filing jointly) engaged in the following transactions during 2021. Determine their total AGI. LABEL EACH ITEM. 1. Paul works at ABC, Co. where he earned a salary of $95,000. ABC, Co. also paid $10,000 in educational expenses for Paul to pursue a graduate degree under an employee educational assistance program. 2. Paula works at XYZ, Co. where she earned a salary of $75,000. Paul and Paula participate in a healthcare plan through XYZ, Co., where the company covers all insurance premiums ($7,000). XYZ, Co. also offers employees discounted on-sight childcare. The couple's two children (ages 3 and 5) both go to childcare at XYZ, Co (the total cost of $18,000 is paid half by XYZ and half by Paula). 3. On July 1 of the current year the couple loaned Paula's sister $50,000 at a zero percent interest rate. The applicable federal interest rate is 2 percent. 4. Paul enjoys online sports betting. During the year he had $4,000 in gambling losses and $5,000 in gambling winnings ($1,000 of net winnings). Paul donated his $1,000 of net winnings to a qualified charitable organization.
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