Linda and Don are married and file a joint return. In 2017, they received $12,000 in Social

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Linda and Don are married and file a joint return. In 2017, they received $12,000 in Social Security benefits and $35,000 in taxable pension benefits and interest.
a. Compute the couple’s adjusted gross income on a joint return.
b. Don would like to know whether they should sell for $100,000 (at no gain or loss) a corporate bond that pays 8% in interest each year and use the proceeds to buy a $100,000 nontaxable State of Virginia bond that will pay $6,000 in interest each year.
c. If Linda in part (a) works part-time and earns $30,000, how much will Linda and Don’s adjusted gross income increase?

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South-Western Federal Taxation 2018 Comprehensive

ISBN: 9781337386005

41st Edition

Authors: David M. Maloney, William H. Hoffman, Jr., William A. Raabe, James C. Young

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