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Al is single, age 60, and has gross income of $140,000, of which $120,000 is salary and $20,000 is rental income. His deductible expenses are as follows:
Charitable contributions 4,000
Contribution to a traditional IRA 6,000
Expenses paid on rental property 7,500
Interest on home mortgage and property taxes on personal residence 7,200
State income tax 2,200
What is Al's AGI?
a.$140,000.
b.$126,500.
c.$114,000.
d.$134,000.



Answer :

Al's AGI is  $126,500.

What is gross income?

Before any deductions or taxes, gross income is the total of all wages, salaries, profits, interest payments, rentals, and other sources of income. It differs from net income, which is calculated as gross income less any applicable taxes and other deductions.

Here, we have

Given

Gross income of $140,000

Fewer Deductible expenses :

Alimony ($20,000)

Contribution to a traditional IRA ($6,000)

Expenses paid on rental property ($7,500)

AGI = Gross income - Contribution to a traditional IRA- Expenses paid on rental property

AGI = $140,000 - $6,000 - $7,500

AGI = $126,500.

Hence, Al's AGI is  $126,500.

To learn more about the gross income from the given link

https://brainly.com/question/15530787

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