Tom and Heidi, husband and wife, file separate returns. Tom and Heidi live in a common law state. Tom's salary is $82,000 and Heidi's salary is $80,000. Heidi receives dividend income of $7,000 from stock inherited from her parents. Tom receives interest income of $5,000 from bonds purchased with his salary after marriage. Tom and Heidi receive $12,000 dividend income from stock they purchased
jointly. Tom's income would be
A) $92,000.
B) $93,000.
C) $94,000.
D) $96,500.
B) $93,000.
Income is taxed to the person who earned it. Only income from jointly owned property is shared. ($82,000 + $5,000 + $6,000 = $93,000)
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