Jeannie,a Single Taxpayer,retired During the Year,to Take Over the Management

question 40

Essay

Jeannie,a single taxpayer,retired during the year,to take over the management of some rental property.She had the following items of income and expense:
Salary prior to retirement date $34,000
Dividends from domestic corporation 4,000
Interest from City of Los Angeles bonds 5,000
Annuity (60% exclusion ratio)12,000
Share of partnership income 14,000
Partnership distribution 10,000
Rent income 17,000
Rent expenses 9,000
What is Jeannie's adjusted gross income for the year?

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Definitions:

Simple Interest

Interest computed exclusively on the principal sum, without adding compounded interest.

Short-Term Investments

Assets that are expected to be converted into cash, sold, or consumed within one year or one business cycle, whichever is longer.

Non-Interest-Bearing

A financial instrument or account that does not earn interest over time, implying that its value does not increase beyond the principal amount.

Promissory Note

A finance-related written assurance where one party obligates to pay the other a clearly defined monetary amount, either when required or at a particular future time.