Question

In 2019, Amanda and Jaxon Stuart have a daughter who is 1 year old. The Stuarts are full-time students and they are both 23 years old. Their only sources of income are gains from stock they held for three years before selling and wages from part-time jobs. What is their earned income credit in the following alternative scenarios if they file jointly?a. Their AGI is $15,000, consisting of $5,000 of capital gains and $10,000 of wages.
b. Their AGI is $15,000, consisting of $10,000 of lottery winnings (unearned income) and $5,000 of wages.
c. Their AGI is $25,000, consisting of $20,000 of wages and $5,000 of lottery winnings (unearned income).
d. Their AGI is $25,000, consisting of $5,000 of wages and $20,000 of lottery winnings (unearned income).
e. Their AGI is $10,000, consisting of $10,000 of lottery winnings (unearned income).

Answer 1

Answer:

a. Their AGI is $15,000, consisting of $5,000 of capital gains and $10,000 of wages.  

• $0, SINCE INVESTMENT INCOME EXCEEDS $3,600

b. Their AGI is $15,000, consisting of $10,000 of lottery winnings (unearned income) and $5,000 of wages.  

• $3,526, SINCE TOTAL EARNED INCOME AND AGI ARE LESS THAN $46,884

c. Their AGI is $25,000, consisting of $20,000 of wages and $5,000 of lottery winnings (unearned income).  

• $3,526, SINCE TOTAL EARNED INCOME AND AGI ARE LESS THAN $46,884

d. Their AGI is $25,000, consisting of $5,000 of wages and $20,000 of lottery winnings (unearned income).  

• $3,526, SINCE TOTAL EARNED INCOME AND AGI ARE LESS THAN $46,884

e. Their AGI is $10,000, consisting of $10,000 of lottery winnings (unearned income).

• $0, SINCE NO EARNED INCOME IS INCLUDED