In 2017, Carol, who is 54 and single, earned a salary of $54,000 and $6,000 of interest on State of Nevada bonds. She contributed $2,000 to her Roth IRA, paid a $4,000 hospital bill, state income taxes of $1,500, real estate taxes of $900, mortgage interest of $4,500, and $2,000 interest on her margin account under which she purchased the bonds. What is Carol's taxable income?

Question

Quizplus · Accepted Answer

$54,000 - ($1,500 + $900 + $4,500) - $4,050 personal exemption = $43,050; the hospital bill is less than 10% of AGI; the contribution to a Roth IRA is not deductible; the tax-exempt bond interest and related interest paid on the margin account do not affect taxable income.

In 2017, Carol, Who Is 54 and Single, Earned a Salary