Homework Problem II
Mila Kunis is a single parent living with her two
daughters, whom she provides all support. Her daughters
are age 12 and 19 years old, with the eldest attending GCC.
During the past year, her investments have appreciated from
a cost of $20,000 to a year-end value of $22,000. She had
income and expenditures for the year as follows.
Salary
$76,000
Prizes won on Wheel of Fortune
3,000
Interest income from:
Bank account
1,000
City of Mesa bonds
2,000
Illegal income
8,000
Inheritance received
40,000
Gift from parent
10,000
Contribution to Roth I.R.A.
5,000
Potential Itemized Deductions:
Diamondbacks season tickets
4,400
Food
5,000
Interest expense on car loan
1,200
Interest expense on home mortgage
6,000
Property taxes paid (car and home)
2,000
Charitable contributions
2,000
Federal income tax withheld.
7,000
State income tax withheld
3,000
Tuition and books for GCC
3,200
Compute the amount of: a) taxable income,
b) income taxes, and
c) amount of tax to be paid (refunded)
Note: It is not acceptable to submit this page as
homework. Prepare answer, in good form, on a
separate sheet.
