Question

During 2018, Marvin had the following transactions: Salary $50,000 Bank loan (proceeds used to buy personal auto) 10,000 Alimony paid (divorce was finalized in 2010). 12,000 Child support paid 6,000 Gift from aunt 20,000 Marvin's AGI is: a. $38,000. b. $32,000. c. $56,000. d. $44,000. e. $64,000.

Answer 1

A. $38,000.

Step-by-step explanation:

$50,000 (Salary) - $12,000 (Alimony) = $38,000.

The gift is an exclusion while the child support is nondeductible. Amounts borrowed are not income.