Lee, a married individual, is an employee with three rental properties in which

Question

Lee, a married individual, is an employee with three rental properties in which lee does not actively participate. In 20x14, property 1 had a net loss of $10,000, Property 2 had a net gain of $25,000, and property 3 had a loss of $5,000. Lee's W-2 income in 20X14 was $110,000. Considering only the foregoing facts, what is Lee's 20X14 adjusted gross income? $120,000 $110,000 $125,000 $135,00 Anscomb is an employee who also solely owns and actively participates in a rental activity which produced a $20,000 loss in the current year. Anscomb's W-2 income in the current year is $115,000. Considering only the foregoing facts, what should anscomb's adjusted gross income be for the current year? $97,500 $107,500 $115,000 $102,500 Lewis is not an active participant in three rental activities, which have turned profits in recent years. The following gain and losses apply to the current year for lewis:

Explanation / Answer

1. (a) $120000 , adjusted income is the net effect on the income after loss and gain

   Adjusted income = $110000 + 25000(Gain) - [10000 + 5000](loss)

   = $110000 + $25000 - $15000

   =$120000

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