Question
Your firm has clients named Danny and Mary. They are married and have two dependent children. They also fully support Mary's mother, who lives with
Your firm has clients named Danny and Mary. They are married and have two dependent children. They also fully support Mary's mother, who lives with them and has no income. Their 2010 tax and other related information is as follows: Total salaries - $110,000 Bank account interest income - $3,500 Municipal bond interest income - $1,500 Danny has part-time consultant income of $7200 Rent income - $7,000 Rent expenses - $9,000 Value of employer-provided medical insurance - $5,500 Value of premiums for $50,000 of group term life insurance provided by employer - $500 Share of partnership income - $30,000 Partnership distribution - $10,000 Dividend income from ABC stock - $2,000 Loan from Danny's parents - $5,000 Gift from Danny's parents - $15,000 Total itemized deductions - $16,000 Determine Danny and Mary's taxable income. Please included Dividend income from ABC stock and rental income and expense.
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