Mr and Mrs

question 13

Multiple Choice

Mr. and Mrs. Liddy, ages 39 and 41, file a joint return and have no dependents for the year. Here is their relevant information. Compute their adjusted gross income (AGI) and taxable income.

• A)AGI $50,200; taxable income $30,200
• B)AGI $52,000; taxable income $32,000
• C)AGI $52,000; taxable income $30,200
• D)AGI $50,200; taxable income $39,200

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Definitions:

Perpetuity

A financial instrument that pays a fixed amount of money indefinitely, with no end date.

Annually Compounded

A method of calculating interest where the interest is added to the principal sum once a year, resulting in interest on interest.

Fair Market Value

The price at which an asset would trade in a competitive auction setting, reflecting the true value as agreed upon by a willing buyer and seller.

RRSP

A Registered Retirement Savings Plan, a Canadian investment account for holding savings and investment assets, with certain tax advantages.