Question

Jocelyn and Esteban file a joint return. For the current year, they had the following items:

Salaries: $120,000
Loss on sale of §
1244 stock acquired two years ago: 105,000
Gain on sale of §
1244 stock acquired six months ago: 20,000
Nonbusiness bad debt: 19,000
Determine their AGI for the current year.

Answer 1

Jocelyn and Esteban's AGI for the current year is $16,000.

Step-by-step explanation:

To determine Jocelyn and Esteban's adjusted gross income (AGI), we need to add up their incomes and subtract any deductible losses.

Income includes salaries, gains on the sale of stock, and nonbusiness bad debt. So, their total income is $120,000 + $20,000 - $105,000 - $19,000 = $16,000.

Their AGI is the difference between their total income and any deductible losses. Therefore, their AGI for the current year is $16,000.