During 2016,Sarah had the following transactions:
Salary
$ 80,000
Interest income on City of Baltimore bonds
1,000
Damages for personal injury (car accident)
100,000
Punitive damages (same car accident)
200,000
Cash dividends from Chevron Corporation stock
7,000
Sarah's AGI is:
A)$185,000.
B)$187,000.
C)$285,000.
D)$287,000.
E)$387,000.

Question

Quizplus · Accepted Answer

Sarah's AGI includes her salary ($80,000), punitive damages ($200,000), and cash dividends ($7,000). Interest income on municipal bonds and damages for personal injury are not included in AGI. Therefore, her AGI is $287,000.

During 2016,Sarah Had the Following Transactions