Daniel, age 38, is single and has the following income and expenses in 2016.
Salary income ......................................................................$60,000
Net rent income ......................................................................6,000
Dividend income .....................................................................3,500
Payment of alimony ................................................................12,000
Mortgage interest on residence .....................................................4,900
Property tax on residence ............................................................1,200
Contribution to traditional IRA ....................................................5,000
Contribution to United Church .....................................................2,100
Loss on the sale of real estate (held for investment) .............................2,000
Medical expenses .....................................................................3,250
State income tax........................................................................ 300
Federal income tax ...................................................................7,000
a. Calculate Daniel's AGI.
b. Should Daniel itemize his deductions from AGI or take the standard deduction?
Explain.