For each of the following independent questions, determine the dollar amount ($) impact to Mark’s adjusted gross income (increase, decrease or no impact).

1. Salary of $100,000 from Amex Corporation (a C corporation). He contributed $10,000 to his Traditional 401k.

2. Purchased 1,000 shares of ABC Inc. for $4. During the year, received 250 shares as a stock dividend. Sold 100 shares for $3 each.

3. $650 interest income from City of Miami bonds.

4. $325 cash dividend income from stock in XYZ. corporation (all made from earnings & profits)

5. $500 cash dividend income from Broke Inc. The corporation had no accumulated earnings and profit. John’s basis in the stock was $350 before the dividend.

6. Loaned his son $9,000 interest free. His son used the money to invest in bonds and earned $1,100 in investment income. The market rate for similar loans was 8%.

7. Paid $12,000 in alimony during the year from a divorce that was settled in 2016.

8. Received a $11,000 gift from his parents.

Answer rating: 100% (QA)

1 Increase in the adjusted gross income by 90000 2 Decrease in the adjusted gross income by 50 Loss ... View the full answer