Gunter, Who Is Divorced, Provides You with the Following Financial

question 27

Essay

Gunter, who is divorced, provides you with the following financial information for the current year.Calculate Gunter's AMTI. $\begin{array}{lr}\text { Salary } && \$ 460,000 \\\text { Gain on sale of land held nine months } && 50,000\\\text { (regular income tax basis is } \$ 14,000 \text { less than AMT basis) }\\\text { Traditional IRA contribution } && 5,000\\\text { Itemized deductions: }\\\text { Charitable contributions } & \$ 13,000 \\\text { Home mortgage interest on his principal residence } & 14,000\end{array}$
$\begin{array}{ccc}\text { State income taxes } & \underline{18,000} & (45,000) \\\text { Private activity municipal bond interest } && 25,000\end{array}$

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Definitions:

Operating Activities

The primary revenue-generating activities of an organization, as opposed to investing and financing activities.

Financing Activities

Transactions and events where a business raises funds to support its operations or capital expenditures often through borrowing or issuing equity.

Operating Activities

Transactions and others events that are not investing or financing activities that enter into the determination of net income.

Net Income

The total profit of a company after all expenses, including taxes and operating expenses, have been deducted from total revenue.