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22 July, 19:29

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?

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  1. 22 July, 19:38
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    Adjusted Gross Income = $26,000

    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
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