Earned and Unearned Income, Transfers from Others (LO. 3) Elwood is retired. During 2020, he receives $11,000 Social Security benefits. In addition, he receives $5,800 in cash dividends on stocks thet he owns and $8,000 in interest on tax-exempt bonds. Assuming that Elwood is single, what is his gross income if a. He recelves no other ingome?s 5,800 b. He also recelves $10,900 in unemployment compensation?S 5,450 X C. He selis some land for $79,600 and he paid $44,300 for the land? s
Earned and Unearned Income, Transfers from Others (LO. 3) Elwood is retired. During 2020, he receives $11,000 Social Security benefits. In addition, he receives $5,800 in cash dividends on stocks thet he owns and $8,000 in interest on tax-exempt bonds. Assuming that Elwood is single, what is his gross income if a. He recelves no other ingome?s 5,800 b. He also recelves $10,900 in unemployment compensation?S 5,450 X C. He selis some land for $79,600 and he paid $44,300 for the land? s
Chapter10: Deductions And Losses: Certain Itemized Deductions
Section: Chapter Questions
Problem 30P
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Transcribed Image Text:Earned and Unearned Income, Transfers from Others (LO. 3)
Elwood is retired. During 2020, he receives $11,000 in Social Security benefits. In addition, he receives $5,800 in cash dividends on stocks that he owns and $8,000 in
interest on tax-exempt bonds. Assuming that Elwood is single, what is his gross income if
a. He recelves no other ingome?S
5,800
b. He also recelves $10,900 in unemployment compensation?S
5,450 X
c. He selis some land for $79,600 and he paid $44,300 for the land? s
Fendacx
Check yWun
Under the capital recovery concept, It could be said that half of each payment received from Social Security represents a return of
the taxpayer's investment and is therefore excluded, much like annuities. But for lower-income taxpayers, a lesser of formula is
applied to determine the amount to Include in gross income.
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