Question

Nell, single and age 38, had the following income and expense items in 2019: Nonbusiness bad debt $6,000 Business bad debt 2,000 Nonbusiness long-term capital gain 4,000 Nonbusiness short-term capital loss 3,000 Salary 50,000 Interest income 3,000 Determine Nell’s AGI for 2019. Nell has an overall capital loss in the amount of $. However, Nell may deduct only $ this year. Nell's adjusted gross income is $.

Answer 1

Nell's adjusted gross income is $48,000

Step-by-step explanation:

The computation is shown below:

= Salary income + interest income - Business bad debt - net loss

where,

Net loss = - Non business short-term capital loss - Non business bad debt + Non business long-term capital gain

= - $3,000 - $6,000 + $4,000

= - $5,000

But the capital loss would be $3,000

So, the adjusted gross income would be

= $50,000 + $3,000 - $2,000 - $3,000

= $48,000