Jim and Sue are married and file a joint return. Sue has a salary of $70,000 and interest from a brokerage account of 3,000. Jim manages their vacation home rental. They rented the property out for 10 months and used it for personal vacation for 2 months. Gross rental income from the property was $11,000. They incurred the following expenses: mortgage interest, $7,000; real estate taxes, $2,500; utilities, $1,800; maintenance, $1,500; and depreciation, $4,000. They also sold 500 shares of Kimber corporation stock for $10,000 which they had purchased 2 years ago for $6,000. Jim was interested in purchasing an out-of-town flower shop. He incurred $1,000 of travel expenses and paid an appraiser to appraise the property $500. The business was not acquired. Compute Jim and Sue's taxable income for the year.

Answer rating: 100% (QA)

Taxable income is income in which tax is imposed To obtain taxable income add up all income from all ... View the full answer