Question

Eduardo, who is 64 years of age and single, received wages of $15,000, interest income of $3,000, dividends of $2,000, municipal bond interest of $7,000 and state unemployment compensation of $3,000. what is eduardo's federal gross income?

Answer 1

Eduardo's federal gross income is calculated by adding his wages, interest income, dividends, and state unemployment compensation, but excluding his tax-exempt municipal bond interest, for a total of $23,000.

Step-by-step explanation:

The student's question pertains to the calculation of federal gross income for tax purposes. To calculate Eduardo's federal gross income, we must include his earnings from work, interest income, dividends, and state unemployment compensation. However, municipal bond interest is typically exempt from federal taxes and does not form part of the gross income calculation.

Eduardo's federal gross income is calculated as follows:

• 
  
• Wages: $15,000
• 
  
• Interest Income: $3,000
• 
  
• Dividends: $2,000
• 
  
• State Unemployment Compensation: $3,000

The municipal bond interest of $7,000 is not included because it is exempt from federal income tax.
Adding the taxable incomes together, Eduardo's federal gross income is:

$15,000 (wages) + $3,000 (interest income) + $2,000 (dividends) + $3,000 (unemployment compensation) = $23,000.

Answer 2

Gross income is:
~ All income in the form of money, property, and services that is not exempt from tax.
~ Gross receipts from rental property (taxes, repairs, etc., are not deducted).
~ A partner's share of the gross, not a share of the net, partnership income. ~ Unemployment compensation and certain scholarships and fellowships. Tax exempt income, such as certain social security payments, is not included in gross income. Type of Income Amount Gross Income
------------- ----- ------------
Wages $15000
Interest $3000
Tax-exempt interest $3,000
Dividends $2000
Unemployment compensation $4,000
thus Total $21000