I need help with a discussion on the following:
Your firm has clients named Danny and Mary. They are married and have two dependent children. They also fully support Mary's mother, who lives with them and has no income. Their 2010 tax and other related information is as follows:
Total salaries - $110,000
Bank account interest income - $3,500
Municipal bond interest income - $1,500
Danny has part-time consultant income of $7200
Rent income - $7,000
Rent expenses - $9,000
Value of employer-provided medical insurance - $5,500
Value of premiums for $50,000 of group term life insurance provided by employer - $500
Share of partnership income - $30,000
Partnership distribution - $10,000
Dividend income from ABC stock - $2,000
Loan from Danny's parents - $5,000
Gift from Danny's parents - $15,000
Total itemized deductions - $16,000
Determine Danny and Mary's taxable income. I anticipate you will use the IRS website for reference to publications or forms.