Problem $6-40($LO$.3)$

Trevor, a friend of yours from high school, works as a server at the ST Caf$.$ He asks you to help him prepare his Federal income tax return. When you inquire about why his bank deposits substantially exceed his tip income, he confides to you that he is a bookie on the side. Trevor then provides you with the following documented income and expenses for the year:

Tip income

Gambling income

Gambling expenses

Payouts to winners

Employee compensation

$$16,000$

$52,000$

$29,000$

$8,000$

$7,500$

a$.$ Complete the following to determine how the gambling items will affect Trevor's AGI $($ignore the impact of self$-$employment taxes$).$

If an amount is zero, enter $"0."$

Gross income from gambling

Deductible expenses:

Salaries

Payouts to winners