During 2019, James had the following transactions: Salary $50,000 Bank loan (proceeds used to buy a car) 15,000 Alimony paid (divorce was finalized in 2015)

Accounting Mar 02, 2021

During 2019, James had the following transactions:

Salary

$50,000

Bank loan (proceeds used to buy a car)

15,000

Alimony paid (divorce was finalized in 2015).

11,000

Gift from aunt

12,000

James' AGI is:

a.$62,000

b.$50,000

c.$39,000

d.65,000

e.$54,000

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Answer

So, the correct option is C "$39,000".

Explanation

Computation of James' AGI:


Salary :	$50,000	(to be mentioned on FORM 1040)
Less : Alimony	(11,000)	(Alimony for the divorced finalized before 2019, is tax deductible for person paying it and included in Form 1040 of the person receiving it)
AGI	$ 39,000

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