Mike Is a Self-Employed TV Technician

question 33

Essay

Mike is a self-employed TV technician.He is usually paid as soon as he completes repairs but occasionally bills a customer with payment expected within 30 days.At the end of the year, he has $2,500 of receivables outstanding.He expects to collect $1,200 of this and write off the remainder.Mike is a cash basis taxpayer and had net earnings from his business (not including the effect of the items above) of $55,000.He also had $3,500 interest income and $200 gambling winnings, and he sold corporate stock for $7,000.The stock had been purchased in 2015 for $8,200.Mike is single and claims the standard deduction.What is his 2019 taxable income? (Ignore the self-employment tax deduction.)

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Definitions:

Medulla Oblongata

The lowest part of the brainstem, controlling vital body functions such as breathing, heart rate, and blood pressure.

Vestibule

An entrance or enclosed antechamber between the outside and the interior of a building or space.

Incus

A small anvil-shaped bone in the middle ear that, along with the malleus and stapes, helps transmit sound vibrations to the inner ear.

Stapes

The smallest bone in the human body, located in the middle ear, transmitting sound vibrations from the incus to the inner ear.