Final answer:
Jack's adjusted gross income is calculated by adding his salary and partnership income to get $176,300, and then subtracting the qualifying deductions for tuition interest and alimony payments, resulting in an AGI of $143,000.
Step-by-step explanation:
To calculate Jack's adjusted gross income (AGI), we will start with his total income and then subtract any deductions that are allowed to arrive at the AGI. Jack's total income includes his salary, interest on partnership profits, and he may be able to deduct interest on qualified education loans, alimony payments, and moving expenses, depending on various tax codes and qualifications.
The following items are included in the income calculation:
- Salary: $167,500
- Partnership income: $8,800
The following items are deductions:
- Qualified tuition interest: $5,000
- Alimony payments (for agreements prior to 2019): $28,300
Moving expenses were deductible in certain years, but under the Tax Cuts and Jobs Act, they are generally not deductible for tax years 2018 through 2025 except for active duty military members. As Jack's divorce occurred in 2012, his alimony payments are considered deductible.
Therefore, to calculate the AGI for Jack:
- Add the salary and partnership income: $167,500 + $8,800 = $176,300
- Deduct the qualified tuition interest and alimony payments: $176,300 - $5,000 - $28,300 = $143,000
Jack's adjusted gross income would be $143,000 under these circumstances.