Question

Lee and Pat are married taxpayers living in Louisiana. Lee earns wages of $40,000 and has $5,000 of dividend income from separate property. Lee and Pat have interest income from community property of $10,000. If Lee and Pat file separate income tax returns, what amount of income must be included on Lee's separate tax return?

Answer 1

$27,500

Step-by-step explanation:

Data provided in the question:

Wages earned by the Lee = $40,000

Dividend income from separate property = $5,000

Interest income from community property = $10,000

Now,

The amount of income that must be included on Lee's separate tax return

= 50% of [Wages earned + Dividend income + Interest income ]

= 0.50 × [ $40,000 + $5,000 + $10,000 ]

= 0.50 × $55,000

= $27,500