Mr. Mei-Yo Chien is retired. He is married, and the couple have the following sources of income-
- Pension income $12,000
- Taxable distributions from Mr. Chien's 401(k) 15,000
- Taxable interest income 2,000
- Mr. Chien's Social Security benefit 14,000
- Mrs. Chien's Social Security benefit 7,000
a. Determine the gross income reported on the Chiens' joint tax return.
b. Without changing your answer to part (a) above, assume that the Chiens also had $10,000 interest income on tax-exempt municipal bonds. Would your answer to part (a) above change as a result of this additional source of income? If so, what would their gross income now be?