Question

Debbie is age 67 and unmarried and her only sources of income are 200,000 in taxable interest and 20,000 of Social Security benefits. Debbie's adjusted gross income for the year is:

1) 220,000
2) 217,000
3) 203,000
4) 200,000
5) None of these

Answer 1

Debbie's adjusted gross income is most likely $200,000, which is just her taxable interest income, assuming her Social Security benefits are not taxable.

Step-by-step explanation:

The student asked about Debbie's adjusted gross income (AGI) given her income sources. To determine the AGI, one must sum up all taxable income sources. Debbie has $200,000 in taxable interest and $20,000 in Social Security benefits. However, only a portion of Social Security benefits may be taxable, depending on the provisional income calculation which isn't provided here. If we assume all the Social Security benefits are tax-free, Debbie's AGI would be her taxable interest only, which is $200,000. If a portion of Social Security is taxable, the AGI would be higher but without additional information, an exact figure cannot be determined. Since the choice that represents $200,000 is an option (4), we can consider that as the most accurate answer given the lack of information on the taxation of the Social Security benefits.