Ashley, who is age 45, earned a salary of $30,000 until she was permanently disabled (i.e. blinded at Fairplex's 4th of July Fireworks Show from illegal fireworks brought to the Fairplex by CPP Engineering students while working at her County of Los Angeles Fire Department job on July 4, 2020. She received Workers' Compensation benefits in the amount of $23,000 for the period of July 5th through December 31, 2020. She sold 100 shares of IBM stock on December 1, 2020 for $6,000. She purchased these shares for $10,000 on January 2, 2016. She inherited $50,000 in cash from her mother's estate on June 1, 2020. She won the 50/50 raffle at her church's annual fund raiser in the amount of $500. She had interest income from County of Los Angeles Water Bonds in the amount of $1,000, interest from a Bank of America certificate of deposit in the amount of $800 and interest from U.S. Savings Bonds in the amount of $2,000. She made a traditional IRA contribution of $7,000. She is married and has a dependent son, Jay, who is age 15, Her itemized deductions are $20,000. She filed a lawsuit against the County of Los Angeles & Fairplex for her injuries due to lax security at L.A. Fair Grounds and received compensatory damages of $500,000 and punitive damages of $10,000. Ignore the potential effects of any possible tax credits.

1. What is Ashley's filing status for 2020?

2. Calculate Ashley's Gross Income for 2020? Show your calculations.

3. What are Ashley's Adjustments from Gross Income for 2020? Show your calculations.

4. What is Ashley's Adjusted Gross Income for 2020?

5. What is the amount of the standard deduction that is available to Ashley for 2020?

6. Will Ashley claim her itemized deductions or the standard deduction for 2020?

7. What is Ashley's Taxable Income for 2020?

8.Calculate Ashley's capital gain/loss on the IBM Stock. What amount is reported as gross income?

9.List the income items which are non taxable for 2020.

Answer rating: 100% (QA)

As per given details please refer below answer Salary income of 30000 is taxable and added to Ashley income Workers compensation benefits are not taxa... View the full answer