The following information applies to jasmine, who is single, for 2017: salary $56,000interest income from first bank of lexington 1,500dividends from watters company stock 3,000contribution to a traditional ira 4,000loan repayment from her friend 1,000capital loss from sale of personal vehicle (2,300)number of potential dependents ? age 44jasmine maintains a household for her sister, who has $9,000 from social security. in addition, jasmine's aunt lives with her and has income of $3,000.the personal exemption amount for 2017 is $4,050.calculate jasmine's taxable income for 2017.

Jasmine's taxable income for the year 2017 is $ 42,050

Explanation:

we are going to do a step wise calculation for taking out the taxable income of Jasmine,

the first step is to take out the gross income of Jasmine,

GROSS INCOME =

Salary + interest income from first bank of Lexington + Dividend income

= $56,000 + $1500 + $ 3000

= $60,500

Next step is to take out adjusted gross income by subtracting contribution to IRA from gross income,

ADJUSTED INCOME =

gross income - contribution to IRA

= $60,500 - $4000

= $56,500

Next step would be to subtract standard deduction ($6350 as of 2017) and personal exemption ( $8100 - $4050 x 2, multiplied by 2 because Jasmine's aunt live with her) from adjusted gross income,

TAXABLE INCOME =

=$56,500 - $ 6350 - $8100

= $ 42,050