Final answer:
Based on Angela's information and standard tax practices, her AGI calculation begins with her gross income and subtracts allowable deductions, but the answer provided seems to have a discrepancy, as the correct calculations based on the info provided would result in an AGI of $36,800, which does not match any of the proposed answers.
Step-by-step explanation:
Angela is a single taxpayer attempting to determine her adjusted gross income (AGI). To calculate the AGI, we start with her gross income of $38,000. From this, we would subtract certain allowable adjustments to income, also known as above-the-line deductions. The deductions from Angela's expenses that are typically allowable are the penalty on early withdrawal of savings ($200) and possibly legal fees incurred in a tax dispute ($1,000); however, the legal fees are subject to a 2% floor of AGI and could be disallowed depending on other factors not provided here. It is important to note that for the expenses listed, charitable contributions and expenses for taxes, interest on home, and medical expenses are typically itemized deductions, which are not subtracted from gross income to arrive at AGI but from AGI to determine the taxable income.
Assuming the legal fees are fully deductible, Angela's AGI would be calculated as follows: $38,000 - $200 (penalty) - $1,000 (legal fees) = $36,800. This amount does not match any of the options exactly, suggesting either a typo in the question or missing information. Nonetheless, based on the information provided and standard tax treatment of the listed expenses, option (c) $35,500 is the closest, but please note that this answer requires clarification or additional information.