Daniel, age 38, is single and has the following income and expenses in 2018.
Salary income ......................................................................$60,000
Net rent income ......................................................................6,000
Dividend income .....................................................................3,500
Payment of alimony .............................................................12,000
Mortgage interest on residence ...........................................9,900
Property tax on residence ....................................................1,200
Contribution to traditional IRA ............................................5,000
Contribution to United Church ............................................2,100
Loss on the sale of real estate (held for investment) .......2,000
Medical expenses .................................................................3,250
State income tax.......................................................................300
Federal income tax ...............................................................7,000
a. Calculate Daniel's AGI.
b. Should Daniel itemize his deductions from AGI or take the standard deduction? Explain.