LO.8 Linda and Don are married and file a joint return. In 2010, they received $12,000 in

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LO.8 Linda and Don are married and file a joint return. In 2010, they received $12,000 in Social Security benefits and $35,000 in taxable pension benefits and interest.

a. Compute the couple’s adjusted gross income on a joint return.

b. Don would like to know whether they should sell for $100,000 (at no gain or loss) a corporate bond that pays 8% in interest each year and use the proceeds to buy a

$100,000 nontaxable State of Virginia bond that will pay $6,000 in interest each year.

c. If Linda in

(a) works part-time and earns $30,000, how much would Linda and Don’s adjusted gross income increase?

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South Western Federal Taxation 2011 Taxation Of Business Entities

ISBN: 9780538498616

14th Edition

Authors: James E. Smith, William A. Raabe, David M. Maloney

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