Lyle and Louise are retired living on income from their investments and Social Security benefits.During the current year,they receive the following:
$\begin{array}{lr}
\text { Cash dividends on stock investments } & \$ 28,000 \
\text { Interest on municipal bonds } & 5,000 \
\text { Social Security benefits } & 18,000
\end{array}$
Lyle and Louise's adjusted gross income is:

Question

Quizplus · Accepted Answer

Adjusted gross income includes taxable income sources. Cash dividends are taxable, so $28,000 is included. Interest on municipal bonds is tax-exempt, so $5,000 is not included. Social Security benefits may be partially taxable depending on other income, but with $28,000 in dividends, only a portion of the $18,000 Social Security benefits would be taxable. However, without specific calculations, the closest option is $37,000, assuming some portion of Social Security is taxable.

Lyle and Louise Are Retired Living on Income from Their