Question

Caesar, a single taxpayer, has a wage income of $75,000. He also has a short-term capital loss of $5,000, a short-term capital gain of $2,000, and a long-term capital gain of $3,000.

What is Caesar's AGI for 2019?

a) $72,000. b) $75,000. c) $77,000. d) $78,000.

Answer 1

correct answer is b) $75,000

Step-by-step explanation:

given data

wage income = $75,000

short term capital loss = $5,000

short term capital gain = $2,000

long term capital gain = $3,000

solution

we get here net short capital loss that is

net short capital loss = short term capital loss - short term capital gain

net short capital loss = $5,000 - $2,000

net short capital loss = $3,000

and leaves him with as = long term capital gain - net short capital loss

= $3,000 - $3,000 = $0

so here AGI for 2019 is $75,000

so correct answer is b) $75,000