Assume all the same facts as in Problem I:7-51 except that James’ salary income is $130,000 instead of $70,000 and that he does not make the election. Compute James’ taxable income for the year.

Data From problem I:7-51

During 2017, James, a single, cash method taxpayer incurred the following expenditures:

Qualified medical expenses.................................................. $ 8,000
Investment interest expense................................................. 16,000
Other investment activity expenses...................................... 15,000
Qualified residence interest................................................... 12,000
Interest on loan on personal auto........................................... 2,000
Charitable contributions........................................................... 3,000

State income tax paid................................................................ 7,000
State sales tax paid.................................................................... 4,500
Property taxes............................................................................ 4,000
Tax return preparation and consulting fees........................... 5,000

James’ income consisted of the following items:

Salary....................................................................................... $70,000
Interest income........................................................................ 20,000
Long-term capital gains........................................................... 23,000
Long-term capital losses........................................................ (15,000)