During 2019, Sandeep had the following transactions: $$\begin{array} { l r }
\text { Salary } & \$ 80,000 \
\text { Interest income on City of Baltimore bonds } & 1,000 \
\text { Damages for personal injury (car accident) } & 100,000 \
\text { Punitive damages (same car accident) } & 200,000 \
\text { Cash dividends from Chevron Corporation stock } & 7,000
\end{array}$$ Sandeep's AGI is:
A)$185,000.
B)$187,000.
C)$285,000.
D)$287,000.
E)$387,000.

Question

During 2019, Sandeep had the following transactions: $$\begin{array} { l r } 
\text { Salary } & \$ 80,000 \
\text { Interest income on City of Baltimore bonds } & 1,000 \
\text { Damages for personal injury (car accident) } & 100,000 \
\text { Punitive damages (same car accident) } & 200,000 \
\text { Cash dividends from Chevron Corporation stock } & 7,000
\end{array}$$ Sandeep's AGI is:
A)$185,000.
B)$187,000.
C)$285,000.
D)$287,000.
E)$387,000.

Quizplus · Accepted Answer

Sandeep's Adjusted Gross Income (AGI) includes his salary ($80,000), punitive damages ($200,000), and cash dividends from Chevron Corporation stock ($7,000). Interest income on municipal bonds (like those from the City of Baltimore) is generally exempt from federal taxes, and damages for personal injury are also not taxable. Therefore, his AGI is $80,000 + $200,000 + $7,000 = $287,000.

During 2019, Sandeep Had the Following Transactions Sandeep's AGI Is: A)$185,000

During 2019, Sandeep Had the Following Transactions Sandeep's AGI Is:
A)$185,000