Mable and Jack file a joint return. For the current year, they had the following

Question

Mable and Jack file a joint return. For the current year, they had the following items: Salaries $120,000 loss on sale of section 1244 stock acquired two years ago $105,000 gain on sale of section 1244 stock acquired six months ago $20,000 non-business bad debt $19,000. Fill in the following to their AGI for the current year:

Salaries:

Loss on sale of section 1244 stock aquired two years ago:

Allowable Loss:

Remaining Loss:

Gain on sale of section 1244 stock aquired 6 months ago:

Nonbusiness bad debt:

Total potential gain (loss)

Net Capital allowable:

AGI:

Carry Loss Carryover:

Explanation / Answer

Salaries: $120,000

Loss on sale of section 1244 stock aquired two years ago: $105,000

Allowable Loss: $100,000

Remaining Loss: $5,000 (105,000 - 100,000)

Gain on sale of section 1244 stock aquired 6 months ago: $20,000

Nonbusiness bad debt: $19,000

Total potential gain (loss) : ($4,000)

(5,000 long term capital loss - (20,000 short term capital gain - 19,000 short term capital loss)) = 5000 long term loss - 1000 gain = $4,000 loss

Net Capital allowable: $3,000

AGI: $17,000 (120,000 - 100,000 - 3,000)

Carry Loss Carryover: $1,000 (4,000 - 3,000)

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