Show transcribed image text Tim and Monica Nelson are married, file a joint return, and are your newest tax clients. They provide you with the following information relating to their 2016 tax return: 1. Tim works as a pediatrician for the county hospital. The W-2 form he received from the hospital shows wages of $150,000 and state income tax withheld of $8,500 2. Monica spends much of her time volunteering, but also works as a substitute teacher for the local schools. During the year, she spent 900 hours volunteering. When she doesn't volunteer she earns $8.00 per hour working as a substitute. The W-2 form she received from the school district shows total wages of $3,888 and state income tax withheld of $85 3. On April 13, the couple paid $250 in state taxes with their 2015 state income tax return. The Nelson's state and local sales taxes in 2016 were $5,500 4. On December 18, the Nelsons donated a small building to the Boy Scouts of America. They purchased the building three years ago for $80,000. A professional appraiser determined the fair market value of the home was $96,000 on December 12 5. Tim and Monica both received corrective eye surgery, at a total cost of $3,000. They also paid $1,900 in health insurance premiums 6. On June 1, the couple bought a car for $30,000, paying $18,000 down and borrowing $12,000 They paid $750 total interest on the loan in 2016 7. On June 10, the Nelsons took out a home equity loan of $20,000 to expand their home. They paid a total of $850 interest with their monthly payments on the loan. 8. The Nelsons paid a total of $2,300 interest on their original home loan. 9. They sold stock in Cabinets, Inc. for $5,200, which they purchased for $7,900 in March of the current year. They also sold stock in The Outdoor Corporation for $12,500, which they purchased several years ago for $8,600 10. Tim incurred the following expenses related to his profession, none of which were reimbursed by his employer tem Amount Subscriptions to medical journals $400 American Medical Association (AMA) annual membership fee 250 11. During the year, the couple paid their former tax advisor $700 to prepare their prior year tax return 12. The Nelsons do not have children, and they do not provide significant financial support to any family members Required Compute the Nelson's taxable income for 2016