Problem 6-34 (Algorithmic) (LO. 1)

Daniel, age 38, is single and has the following income and expenses in 2021:

Salary income	$135,000
Net rent income	5,500
Dividend income	1,100
Payment of alimony (divorce finalized in March 2019)	14,000
Mortgage interest on residence	7,000
Property tax on residence	2,600
Contribution to traditional IRA (assume the amount is fully deductible)	3,000
Contribution to United Church	1,900
Loss on the sale of real estate (held for investment)	700
Medical expenses	4,250
State income tax	1,200
Federal income tax	6,500

Daniel's standard deduction for 2021 is $12,550.

Question Content Area

a. Classify the following expenses as either "Deductible for AGI", "Deductible from AGI", or "Not deductible".

Payment of alimony (divorce finalized in March 2019)	?
Mortgage interest on residence	?
Property tax on residence	?
Contribution to traditional IRA (assume the amount is fully deductible)	?
Contribution to United Church	?
Loss on the sale of real estate (held for investment)	?
Medical expenses	?
State income tax	?
Federal income tax?

What is Daniel's gross income and his AGI? Gross income: $ ? AGI: $ ?

b. Should Daniel itemize his deductions from AGI or take the standard deduction? Because Daniel's total itemized deductions (after any limitations) are $ (?) , he would benefit from (using the standard deduction or itemizing his deductions ?)