Question & Answer: Gross Income. Susan's salary is $44,000 and she received dividends of $600. She received a statement from SJ partnership indicati…..

to another state. Fred paid Ed S1,000 sequently rented the unit to Wayne. Wayne paid the l each and a security deposit of $500. Ed also owns a building that is useu The club has signed a fifteen-year lease at an annual rental o club requested that Ed install a swimming pool on the property. Ed declined to do so. The owner of the club finally constructed the pool himself at a cost of $15,000. What amount must Ed include in gross income? :3-43 Gross Income. Susans salary is $44,000 and she received dividends of $600. She received a statement from SJ partnership indicating that her share of the partnerships income was $4,000. The partnership distributed $1,000 to her during the year and $600 after year- end. She won $2,000 in the state lottery and spent $50 on lottery tickets. Which amounts 3 are taxable? 1:3-44 Interest Income. Holly inherited $10,000 of City of Atlanta bonds in February. In March, she received interest of $500, and in April she sold the bonds at a $200 gain. Holly re deemed Series EE U.S. savings bonds that she had purchased several years ago. The accu mulated interest totaled $800. Holly received $300 of interest on bonds issued by the City of Quebec, Canada. What amount, if any, of gross income must Holly report? :3-45 Annuity Income. Tim retired during the current year at age 58. He purchased an annu- ity from American National Life Company for $40,000. The annuity pays Tim $500 per month for life. a. Compute Tims annual exclusion. b. How much income will Tim report each year after reaching age 84?

Gross Income. Susan’s salary is $44,000 and she received dividends of $600. She received a statement from SJ partnership indicating that her share of the partnership’s income was $4,000. The partnership distributed $1,000 to her during the year and $600 after year-end. She won $2,000 in the state lottery and spent $50 on lottery tickets. Which amounts are taxable? Interest Income. Holly inherited $10,000 of City of Atlanta bonds in February. In March, she received interest of $500, and in April she sold the bonds at a $200 gain. Holly redeemed Series EE U.S. savings bonds that she had purchased several years ago. The accumulated interest totaled $800. Holly received $300 of interest on bonds issued by the City of Quebec, Canada. What amount, if any, of gross income must Holly report? Annuity Income. Tim retired during the current year at age 58. He purchased an annuity from American National Life Company for $40,000. The annuity pays Tim $500 per month for life. a. Compute Tim’s annual exclusion. b. How much income will Tim report each year after reaching age 84?

Expert Answer

I:3-44

The following items are taxable in the hands of Susan:

Salary income	$44000
Dividends	$600
Share in the partnership income	$4000
Lottery winnings	$2000

The partnership distribution of $1000 and $600 will not be taxed in the hands of Susan, because she had paid tax on the partnership income. If she itemizes the deduction, then she can claim deduction of cost of lottery tickets of $50.

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