Q.1- Mr. A and Mrs. B are married and have two dependent children. X & Y, They also fully support Mrs. Bs mother who lives with them and has no income. Their 2012 tax and other related information is as follows: (2.5 marks)

Particulars	Amount in $
Value of premiums for $ 100000 of group term life insurance provided by employer	2,000
Gift from AS parents	60,000
Dividend incomefrom ABC stock,	8,000
Loan from AS parents	20,000
Total salaries	640,000
Bank account interest income	14,000
Gain from the sale of qualified small business stock acquired in 2010	60,000
Total itemized deductions	64,000
Municipal bond interest income	6,000
Value of employer provided medical insurance	22,000

Required: Compute Mr. A and Mrs.B Taxable income. (Show all calculations in proper /good form.)

Solution: