Problem: John, a cash basis taxpayer, died on October 30, 2007. His wife, Joanna, provides you with the following information.
From January 1, 2007 until his death, John received a salary of $60,000. Joanna received a salary of $35,000 during 2007. John had earned commissions of $20,000 which his widow. Joanna, received after his death. Joanna was the beneficiary of a $100,000 whole life policy purchased by John and a $50,000 group term life insurance policy purchased by John's employer. The employer had paid premiums of $250 in John's behalf. In addition, the corporation paid Joanna a $10,000 employee death benefit in John's name. All employees' families received similar benefits regardless of financial need. John and Joanna had itemized deductions of $9,600. They have no children but provided 100% support for John's widowed mother who lives with them and has no income.
What is the amount of their taxable income on their 2007 tax return?