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Sally Earned $210,000 During 20X4

Question 7

Essay

Sally earned $210,000 during 20X4.She also received eligible dividends in the amount of $10,000.She sold a piece of land during the year and recognized a capital gain of $500,000.Sally is married.Her husband earned $100,000 during the year.
Required:
A)Calculate 1)Sally's normal taxable income,2)Sally's taxable income for the alternative minimum tax,and 3)her federal tax liability,before the deduction of any allowable non-refundable tax credits,for both methods.
B)Which method would allow for a deduction of the non-refundable dividend tax credit?
C)Which method will Sally have to use to report her tax liability?

Correct Answer:

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A) blured image Federal tax liability (before non-re...

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