What is George's gross income if he has the following: $78,000 salary, $4,000 dividend income, $2,000 interest income on city of San Francisco bonds, a gain of $14,000 on a stock sale, and a $4,000 operating loss on a small sole proprietorship that he owns?
A)$78,000
B)$84,000
C)$92,000
D)$96,000

Question

Quizplus · Accepted Answer

George's gross income includes his salary, dividend income, interest income, and capital gains. The operating loss is not deducted from gross income. Therefore, his gross income is $78,000 (salary) + $4,000 (dividends) + $2,000 (interest) + $14,000 (capital gain) = $98,000. However, interest on city bonds is typically tax-exempt, so it should not be included in gross income, making it $78,000 + $4,000 + $14,000 = $96,000.

What Is George's Gross Income If He Has the Following