Question

Charles is a single person, age 35, with no dependents. In 2015, Charles has gross income of $75,000 from his sole proprietorship. Charles also incurs $80,000 of deductible business expenses in connection with his proprietorship. He has interest and dividend income of $22,000. Charles has no itemized deductions. Charles's taxable income is

Answer 1

The correct answer is $7,650.

Step-by-step explanation:

According to the scenario, the computation of the given data are as follows:

Gross income from business $75,000

Business deductions (Less) $80,000

Interest and dividend income (Add) $22,000

Gross income $17,000

Standard deduction (Less) $5,700

Exemption (Less) $3,650

Net Taxable income $ 7,650

So, the net taxable income is $7,650.