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Consider the following letter and answer Shadys question.

To my friendly student tax preparer:

Hello, my name is Shady Slim. I understand you are going to help me figure out my gross income for the year . . . whatever that means. Its been a busy year and Im a busy man, so let me give you the lowdown on my life and you can do your thing.

I was unemployed at the beginning of the year and got $2,000 in unemployment compensation. I later got a job as a manager for Roca Cola. I earned $55,250 in base salary this year. My boss gave me a $5,100 Christmas bonus check on December 22. I decided to hold on to that check and not cash it until next year, so I wont have to pay taxes on it this year. Pretty smart, huh? My jobs pretty cool. I get a lot of fringe benefits like a membership to the gym that costs $405 a year and all the Roca Cola I can drink, although I cant really drink a whole lotI figure $40 worth this year.

As part of my manager duties, I get to decide on certain things like contracts for the company. My good buddy, Eddie, runs a bottling company. I made sure that he won the bottling contract for Roca Cola for this year (even though his contract wasnt quite the best). Eddie bought me a Corvette this year for being such a good friend. The Corvette cost $51,000, and Im sure he bought it for me out of the goodness of his heart. What a great guy!

Heres a bit of good luck for the year. Upon leaving my office one day, I found $8,050 lying in the street! Well, one persons bad luck is my good luck, right?

I like to gamble a lot. I won a $27,150 poker tournament in Las Vegas this year. I also won about $5,020 over the year playing the guys at our Friday night poker game. Can you believe that I didnt lose anything this year?

Speaking of the guys, one of them hit me with his car as we were leaving the game one night. He must have been pretty ticked that he lost! I broke my right leg and my left arm. I sued the guy and got $11,200 for my medical expenses and$3,050 to pay my psychotherapist for the emotional problems I had relating to the injuries (I got really depressed!), and I won $12,100 in punitive damages. Thatll teach him that hes not so tough without his car!

Another bit of bad luck. My uncle Monty died this year. I really liked the guy, but the $205,000 inheritance I received from him made me feel a little better about the loss. I did the smart thing with the money and invested it in stocks and bonds and socked a little into my savings account. As a result, I received $605 in dividends from the stock, $205 in interest from the municipal bonds, and $305 in interest from my savings account.

My ex-wife, Alice, is still paying me alimony. Shes a lawyer who divorced me in 2015 because I was unethical or something like that. Because she was making so much money and I was unemployed at the time, the judge ruled that she had to pay ME alimony. Isnt that something? She sent me $3,100 in alimony payments this year. She still kind of likes me, though. She sent me a check for $505 as a Christmas gift this year. I didnt get her anything, though.

So there you go. Thats this year in a nutshell. Can you figure out my gross income and complete page 1 of Form 1040 (through line 7b) and Schedule 1 for me? And because youre a student, this is free, right? Thanks, I owe you one! Let me know if I can get you a six-pack of Roca Cola or something.

1040 Department of the Treasury-Internal Revenue Service (99) U.S. Individual Income Tax Return 2019 OMB No. 1545-0074 IRS Use Only-Do not write or staple in this space. Filing Status Single Married filing jointly Married filing separately (MFS) Head of household (HOH) Qualifying widow(er) (QW) Check only If you checked the MFS box, enter the name of spouse. If you checked the HOH or QW box, enter the child's name if the qualifying person is one box. a child but not your dependent. Your first name and middle initial Last name Your social security number Shady Slim If joint return, spouse's first name and middle initial Last name Spouse's social security number Home address (number and street). If you have a P.O. box, see instructions. Apt. no. Presidential Election Campaign Check here if you, or your spouse if filing jointly, want $3 to go to this fund. City, town or post office, state, and ZIP code. If you have a foreign address, also complete spaces below (see instructions). Checking a box below will not change your tax or refund. You Spouse Foreign country name Foreign province/state/county Foreign postal code If more than four dependents, see instructions and heren Standard Someone can claim: You as a dependent Your spouse as a dependent Deduction Spouse itemizes on a separate return or you were a dual-status alien Age/Blindness You: O Were born before January 2, 1955 Are blind Spouse: Was born before January 2, 1955 O s blind Dependents (see instructions): (2) Social security number (3) Relationship to you (4) if qualifies for (see instructions): Last name Child tax credit (1) First name Credit for other dependents 1 170,085 2b 3b 4b 4d 5b 6 7a 1 Wages, salaries, tips, etc. Attach Form(s) W-2 2a Tax-exempt interest 2a b Taxable interest. Attach Sch. B if required 3a Qualified dividends 605 3a b Ordinary dividends. Attach Sch. B if required Standard Deduction for 4a IRA distributions. 4a b Taxable amount Single or Married Pensions and annuities 4c d Taxable amount filing separately, $12,200 5a Social security benefits 5a b Taxable amount Married filing 6 jointly or Qualifying Capital gain or loss). Attach Schedule D if required. If not required, check here widow(er). 7a Other income from Schedule 1, line 9. $24,400 Head of b Add lines 1, 2b, 3b, 4b, 4d, 5b, 6, and 7a. This is your total income household 8 $18,350 Adjustments to income from Schedule 1, line 22 If you checked b Subtract line 8a from line 7b. This is your adjusted gross income any box under 9 Standard 9 Standard deduction or itemized deductions (from Schedule A) Deduction, 10 Qualified business income deduction. Attach Form 8995 or Form 8995-A 10 see instructions. 11a Add lines 9 and 10. b Taxable income. Subtract line 11a from line 8b. If zero or less, enter -- For Disclosure, Privacy Act, and Paperwork Reduction Act Notice, see separate instructions. Cat. No. 11320B 7b 8a 8b 11a 11b Form 1040 (2019) 14 a e Form 1040 (2019) Page 2 12a Tax (see inst.) Check if any from Form(s): 1 8814 2 4972 3 12a b Add Schedule 2, line 3, and line 12a and enter the total 12b 13a Child tax credit or credit for other dependents. 13a b Add Schedule 3, line 7, and line 13a and enter the total 13b Subtract line 13b from line 12b. If zero or less, enter-O- 14 15 Other taxes, including self-employment tax, from Schedule 2, line 10 15 16 Add lines 14 and 15. This is your total tax. 16 17 Federal income tax withheld from Forms W-2 and 1099 17 18 If you have a Other payments and refundable credits: qualifying child, Earned income credit (EIC). 18a attach Sch. EIC. b Additional child tax credit. Attach Schedule 8812 . If you have 18b . nontaxable c American opportunity credit from Form 8863, line 8 18C combat pay, see instructions. d Schedule 3, line 14. . 18d Add lines 18a through 18d. These are your total other payments and refundable credits 18e 19 Add lines 17 and 18e. These are your total payments 19 Refund 20 If line 19 is more than line 16, subtract line 16 from line 19. This is the amount you overpaid 20 21a Amount of line 20 you want refunded to you. If Form 8888 is attached, check here , 21a Direct deposit? Routing number c Type: Checking Savings See instructions. Account number 22 Amount of line 20 you want applied to your 2020 estimated tax . . 22 Amount 23 Amount you owe. Subtract line 19 from line 16. For details on how to pay, see instructions 23 You Owe 24 Estimated tax penalty (see instructions). . . 24 Third Party Do you want to allow another person (other than your paid preparer) to discuss this return with the IRS? See instructions. Yes. Complete below. Designee O No (Other than Designee's Phone Personal identification paid preparer) name no. number (PIN) Sign Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Here Your signature Date Your occupation If the IRS sent you an Identity Protection PIN, enter it here Joint return? (see inst.) See instructions. Spouse's signature. If a joint return, both must sign. Date Spouse's occupation If the IRS sent your spouse an Keep a copy for Identity Protection PIN, enter it here your records. (see inst.) Phone no. Email address Preparer's name Preparer's signature Date PTIN Check if: : Paid 3rd Party Designee Preparer Firm's name Phone no. Use Only Self-employed Firm's address Firm's EIN Go to www.irs.gov/Form 1040 for instructions and the latest information. Form 1040 (2019) TIME OMB No. 1545-0074 SCHEDULE 1 (Form 1040 or 1040-SR) Additional Income and Adjustments to Income 2019 Department of the Treasury Internal Revenue Service Name(s) shown on Form 1040 or 1040-SR Attach to Form 1040 or 1040-SR. Go to www.irs.gov/Form 1040 for instructions and the latest information. Attachment Sequence No. 01 Your social security number At any time during 2019, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency? 0 Yes Part 1 Additional Income 1 Taxable refunds, credits, or offsets of state and local income taxes 1 2a Alimony received 2a b Date of original divorce or separation agreement (see instructions) 3 Business income or (loss). Attach Schedule C 3 4 Other gains or losses). Attach Form 4797 . 4 5 Rental real estate, royalties, partnerships, S corporations, trusts, etc. Attach Schedule E. 5 6 Farm income or (loss). Attach Schedule F 6 7 Unemployment compensation 7 2,000 8 Other income. List type and amount 8 9 Combine lines 1 through 8. Enter here and on Form 1040 or 1040-SR, line 7a 9 Part II Adjustments to Income 10 Educator expenses 10 11 Certain business expenses of reservists, performing artists, and fee-basis government officials. Attach Form 2106 11 12 Health savings account deduction. Attach Form 8889 12 13 Moving expenses for members of the Armed Forces. Attach Form 3903 13 14 Deductible part of self-employment tax. Attach Schedule SE 14 15 Self-employed SEP, SIMPLE, and qualified plans 15 16 Self-employed health insurance deduction 16 17 Penalty on early withdrawal of savings 17 18a Alimony paid. 18a 3,100 b Recipient's SSN Date of original divorce or separation agreement (see instructions) 19 IRA deduction 19 20 Student loan interest deduction 20 21 Tuition and fees. Attach Form 8917 21 22 Add lines 10 through 21. These are your adjustments to income. Enter here and on Form 1040 or 1040-SR, line 8a 22 For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 71479F Schedule 1 (Form 1040 or 1040-SR) 2019