In: Accounting
This year, Linda Moore earned a $112,000 salary and $2,200 interest income from a jumbo Certificate of Deposit. She recognized a $15,300 capital loss on the sale of undeveloped land. Compute Linda’s AGI and any capital loss carryforward into future years in each of the following cases. She also recognized a $10,500 capital gain from the sale of corporate stock. She also received a $16,000 capital gain distribution from a mutual fund. She had no other capital transactions this year but has a $17,000 capital loss carryforward from a previous year.
Linda Moore earned a salary = $112,000
interest income from a jumbo Certificate of Deposit = $2,200
Linda recognized a capital loss on the sale of undeveloped land = $15,300.
Linda also recognized a capital gain from the sale of corporate stock = $10,500
.Linda also received a capital gain distribution from a mutual fund = $16,000
She had no other capital transactions this year but has a capital loss carryforward = $17,000
Now we got all the data Linda Moore. Calculating no carry forward
Particular | Amount in dollars | |
salary | $112000 | |
+ | interest | $2200 |
- | Deduction gains | $3000 |
AGI | $111,200 |
Explanation :
AGI = $112000 + $2200 - $3000
= $114,200 - $3000
= $111,200
Particular | Amount in dollars | |
Captial loss | $15300 | |
- | Captial gains | $10500 |
- | Deduction | $3000 |
C.F carry forward | $1800 |
Explanation :
AGI = $15300 - $10500- 3000
= $ 15300 - $13500
= $1800
Note :
Maximum 3000 capable of reducing from AGI. If both are loss will be remaining carry foward
b) AGI and Captial Loss Carry Foward
Particular | Amount in dollars | |
salary | $112000 | |
+ | interest | $2200 |
+ | Captial gains | $700 |
AGI | $114,900 |
Explanation :
AGI = $112000 + $2200 +$700
= $114,900
Note:
No captial loss so no carry foward
c) AGI and Captial Loss Carry Foward
Particular | Amount in dollars | |
salary | $112000 | |
+ | interest | $2200 |
- | Deduction gains | $3000 |
AGI | $111,200 |
Explanation :
AGI = $112000 + $2200 - $3000
= $114,200 - $3000
= $111,200
Particular | Amount in dollars | |
Captial loss | $15300 | |
+ | Captial gains last year | $17000 |
- | Deduction | $3000 |
C.F carry forward | $111,200 |
Explanation :
AGI = $15300 + $17000- 3000
= $32,300 - 3000
= $29300
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