During 2017, James, a single, cash method taxpayer incurred the following expenditures: (Click the icon to view the expenditures.) (Click the icon to view the standard deduction schedule.) (Click the icon to view the schedule of personal and dependency exemption and phase-outs.) Requirement Compute James' taxable income for the year. (Assume that he does not make an election to

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During 2017, James, a single, cash method taxpayer incurred the following expenditures: (Click the icon to view the expenditures.) (Click the icon to view the standard deduction schedule.) (Click the icon to view the schedule of personal and dependency exemption and phase-outs.) Requirement Compute James' taxable income for the year. (Assume that he does not make an election to have the net capital gain taxed at the regular tax rates). Begin by calculating the adjusted gross income (AGI). (If a box is not used in the table leave the box empty; do not select a label or enter a zero.) Adjusted gross income (AGI). Now calculate the itemized deductions. (Complete all input cells. Enter a "0" for appropriate balances.) Medical expenses Less: Excess medical expenses Miscellaneous itemized deductions: Less Excess miscellaneous itemized deductions Total itemized deductions Compute James' taxable income for the year. Minus: Deductions from AGI: Taxable income Qualified medical expenses Investment interest expense Other investment activity expenses Qualified residence interest Interest on loan on personal auto Charitable contributions State income tax paid State sales tax paid Property taxes Tax return preparation and consulting fees James' income consisted of the following terms: Salary Interest income Long-term capital gains Long-term capital losses Print Done $ $ 8,000 16,000 15,000 12,000 2,000 3,000 7,000 4,500 4,000 5,000 130,000 20,000 23,000 (15,000) STANDARD DEDUCTION Filing Status Married individuals filing joint returns and surviving spouses Heads of households Unmarried individuals (other than surviving spouses and heads of households) Married individuals filing separate returns Additional standard deduction for the aged and the blind Individual who is married and surviving spouses Individual who is unmarried and not a surviving spouse Taxpayer claimed as dependent on another taxpayer's return: Greater of (1) earned income plus $350 or (2) $1,050. *These amounts are $2.500 and $3,100, respectively, for a taxpayer who is both aged and blind Schedule of Personal and Dependency Exemption and Phase-Outs PERSONAL AND DEPENDENCY EXEMPTION AND PHASE-OUTS Personal and dependency exemption Phase-outs for high income taxpayers Personal and dependency exemptions are reduced by 2% for each $2,500 increment (or part of increment) for AGI above the threshold amount Itemized deductions are reduced by 3% for each dollar of AGI above the threshold amounts (taxpayers cannot lose more than 80% of their allowable itemized deductions). For both provisions, the AGI threshold amounts are: Married individuals fling joint returns and surviving spouses Heads of households $ Unmarried individuals (other than surviving spouses and heads of households) Marned individuals fang separate returns $ 12,700 9,350 6,350 6,350 1,250 1,550 X 4,050 $313.800 287,650 261,500 156,900

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