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

Daniel, age 38, is single and has the following income and expenses in 2022:

Salary income$135,000Net rent income17,500Dividend income1,500Payment of alimony (divorce finalized in March 2020)24,000Mortgage interest on residence8,300Property tax on residence1,400Contribution to traditional IRA (assume the amount is fully deductible)2,700Contribution to United Church2,500Loss on the sale of real estate (held for investment)1,825Medical expenses4,600State income tax2,400Federal income tax3,500

Daniel's standard deduction for 2022 is $12,950.

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)Deductible for AGIDeductible from AGINot deductibleNot deductibleMortgage interest on residenceDeductible for AGIDeductible from AGINot deductibleDeductible from AGIProperty tax on residenceDeductible for AGIDeductible from AGINot deductibleDeductible from AGIContribution to traditional IRA (assume the amount is fully deductible)Deductible for AGIDeductible from AGINot deductibleDeductible for AGIContribution to United ChurchDeductible for AGIDeductible from AGINot deductibleDeductible from AGILoss on the sale of real estate (held for investment)Deductible for AGIDeductible from AGINot deductibleDeductible for AGIMedical expensesDeductible for AGIDeductible from AGINot deductibleDeductible from AGIState income taxDeductible for AGIDeductible from AGINot deductibleDeductible from AGIFederal income taxDeductible for AGIDeductible from AGINot deductibleNot deductible

What is Daniel's gross income and his AGI? Gross income: $fill in the blank 16380bf65fd6fea_10 AGI: $fill in the blank 16380bf65fd6fea_11

Question Content Area

b. Should Daniel itemize his deductions from AGI or take the standard deduction? Because Daniel's total itemized deductions (after any limitations) are $fill in the blank 68efc70aafd501e_1, he would benefit from

using the standard deductionitemizing his deductionsitemizing his deductions

.