Question

Salvatore, an investor-broker, earns $195,000 from his practice in the current year. He receives $35,000 in dividends and interest during the year. In addition, he incurs a loss of $18,000 from an investment in a passive activity acquired three years ago. After considering the passive investment, Salvatore's net income for the current year is _______$

Answer 1

Earnings from practice 195,000

Dividend and interest received 35,000

Loss incurred on investment (18,000)

Net income after passive investment 212,000

Step-by-step explanation:

In this case, we need to aggregate Salvatore's earnings from practice and dividend received from investment and deduct loss incurred on passive investment.