Heather, an individual, reported the following items of income and expense during the current year: Salary $90,000 Alimony that Heather paid to a former spouse $20,000 (Post-Tax Cuts & Jobs Act Alimony) Inheritance from a grandparent $15,000 Proceeds of a lawsuit for physical injuries: $20,000 What
Heather, an individual, reported the following items of income and expense during the current year:
- Salary $90,000
- Alimony that Heather paid to a former spouse $20,000 (Post-Tax Cuts & Jobs Act Alimony)
- Inheritance from a grandparent $15,000
- Proceeds of a lawsuit for physical injuries: $20,000
What is the amount of Heather’s Adjusted Gross Income (AGI)?
Working notes :-
Alimony , Post -TC &Jobs Act [1st Jan 2019] are not deductible as IRS does not consider it as income to the recipient spouse.
Inheritence is not taxable . Income generated from it is taxable as per IRS rules.
Prodceeds of a lawsuit for physical injuries are not taxable under Federal or State Tax Law.
Based on the above working notes we will answer the above MCQ as under --
Please refer step 2
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