Question

In 2018, Tim, a single taxpayer, has ordinary income of $29,000. In addition, he has $2,000 in short-term capital gains, long-term capital losses of $10,000, and long-term capital gains of $4,000. What is Tim's AGI for 2018?

Answer 1

Adjusted Gross Income = $26,000

Step-by-step explanation:

given data

ordinary income = $29,000

short term capital gains = $2,000

long term capital losses = $10,000

long term capital gain = $4,000

to find out

What is Tim's AGI

solution

we get here first Net is long term capital loss that is

Net is long term capital loss = Long term capital gain - Long term capital loss ................1

Net is long term capital loss = $4000 - $10000

Net is long term capital loss = - $6000

and

now long term Capital loss carry forward will be

long term Capital loss carry forward = Net is long term capital loss - short term capital gains

long term Capital loss carry forward = $6000 - $2000

long term Capital loss carry forward = $4000

and

Deduct long term capital loss= -$3,000

here annual limitation is $3,000

so that balance = $1,000 carry forward to next year

so Adjusted Gross Income will be

Adjusted Gross Income = Ordinary Income - Deduct long term capital loss

Adjusted Gross Income = $29,000 - $3000

Adjusted Gross Income = $26,000