The following information is provided for Mary, a California resident. Mary is a single taxpayer who uses the calendar year and cash method of accounting for federal income tax purposes.

Mary received compensation from work as follows:

Total of monthly pay checks received in current year:

Gross Salary $125,000

Federal Income tax withheld 25,000

California Income tax withheld 9,000

Social Security & Medicare tax 9,562

Net Payment Received $81,438

Prior year cash bonus received in January of current year:

Gross Bonus $20,000

Federal Income tax withheld 5,000

Net Payment Received $15,000

In addition to the above:

• The employer paid $8,000 premiums to Big Blue for health care coverage for Mary.
• The employer paid $500 to BBB Insurance for $25,000 of term life insurance coverage offered to Mary as part of a group plan available to all employees.
• The employer paid $1,200 of professional dues and continue education courses in Marys name (all are business related).
• As a reward for her outstanding Holiday Season (prior year) performance, the employer paid $5,000 for a summer Disneyland vacation for Mary and her two small children.

1. What is Marys taxable wages for current year?

Mary had the following investment income:

Interest Income - Virginia State Bonds $750

Interest Income - US Treasury Notes 1,000

Interest Income - Bank of America Savings 100

Interest Income - Corporate Bonds of IBM 500

Interest Income -Los Angeles School Bond 1,000

Total Interest Income Earned $ 3,350

2.What is Marys taxable interest income?

Ten years ago, Mary purchased 1,000 shares of ABC Corporation stock for $20,000. On December 29, Mary sold all of ABC Corporation stock for $5,000. A few days later, on January 5, Mary purchased 600 shares of ABC Corporation stock for $ 2,400. On April 15, she purchased another 500 shares for $ 1,500.

3.How much wash sale is disallowed?

During current year, Mary received from her former spouse, twelve monthly family support payments for herself and her two children at $2,000 per month.

4. How much is Marys alimony income, if any?

As the owner of a small office building, Mary reported the following rental transactions:

Rent Income $ 30,000

Property taxes paid 7,000

Insurance 3,000

Tenant improvement made by tenants with Marys approval 8,000

Mary also paid a 10% management fee, based on gross rent received

5.How much is Marys net rental income?