____ 17. Sim, a computer lab manager, earns a salary of $80,000 and receives $25
ID: 2580683 • Letter: #
Question
____ 17. Sim, a computer lab manager, earns a salary of $80,000 and receives $25,000 in dividends and interest during the year. In addition, he incurs a loss of $50,000 from an investment in a non-real estate passive activity and $13,000 in income from another passive activity. His at-risk amount in the activity at the beginning of the year is $55,000. What is Sim’s adjusted gross income for this year?
a.
$50,000.
b.
$85,000.
c.
$105,000.
d.
None of the above.
instructions : Choose the best multiple choice answer and explain why you chose the answer. MUST provide 2-3 sentence brief explanation and show all work. All sources must be noted.
a.
$50,000.
b.
$85,000.
c.
$105,000.
d.
None of the above.
Explanation / Answer
The adjusted gross income is comprised of earned income of the taxpayer during the tax period. The passive activity loss shall not be a part of it.
Adjusted gross income = Salary + Dividends and Interest
= $80000 + $25000
= $105000
Ans is c.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.