Question

Bill is single and has the following information for 2018. What is his AGI after considering all of this information?

• Bill is an executive and has $400,000 of salary income.

• Bill owns 100% of Holtz, Inc. Holtz is a C corporation with $2,000,000 of taxable income for 2018. Bill receives a $75,000 cash dividend.

• Bill owns 100% of Wallace Enterprises. Wallace is an S corporation. Bill does not materially participate in the S corporation. His basis in the stock is $70,000 before considering any of the 2018 transactions. Wallace Enterprises reports the following information for 2018:

  Ordinary loss from business activities	$ (35,000)
  Municipal bond interest income	10,000
  Cash distribution paid by Wallace to Bill	12,000

• Bill owns an interest in Master, LLC, in which he materially participates. The LLC has a loss for 2018, and his share of the LLC’s loss is ($40,000). His basis in the partnership before the loss is $90,000. In addition, the partnership distributes $20,000 to Bill in 2018.

• Bill also owns a limited partnership interest in Kearns Ltd. His basis in the partnership interest is $80,000 before considering any of the 2018 transactions. Bill’s K‑1 shows that his share of the partnership items for 2018 is as follows:

Ordinary income from business activities	$ 27,000
Interest income from bank account	2,100
Dividend income	4,000
Long term capital gain	13,000
Short-term capital loss	(18,000)
Charitable contributions	(6,000)
Cash distribution to Bill	12,000

Answer 1

1		Wages, salaries, tips, etc. Attach Form(s) W-2													#REF!							7	412,000
2	a	Taxable interest. Attach Schedule B if required.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																				8a	2,100
	b	Tax-exempt interest. Do not include on line 8a													8b		0
3	a	Ordinary dividends. Attach Schedule B if required.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																				9a	79,000
	b	Qualified dividends													9b		12,000
4		Taxable refunds, credits, or offsets of state and local income taxes   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																				10
5		Alimony received														.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .	.   .   .   .   .   .   .   .					11
6		Business income or (loss). Attach Schedule C or C-EZ.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																				12	0
7		Capital gain or (loss). Attach Schedule D if required. If not required, check here.																	FALSE			13	(3,000)
8		Other gains or (losses). Attach Form 4797																			.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .	14
9	a	IRA distributions								15a	0				b	Taxable amount					.   .   .   .   .	15b	0
10	a	Pensions and annuities								16a	0				b	Taxable amount					.   .   .   .   .	16b	0
11		Rental real estate, royalties, partnerships, S corporations, trusts, etc.     Attach Schedule E.																				17	0
12		Farm income or (loss). Attach Schedule F.   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																				18	0
13		Unemployment compensation . .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .   .																				19
14	a	Social security benefits								20a	0				b	Taxable amount .   .   .   .   .   .   .						20b	0
15		Other income. List type and amount.																				21	0
16		Combine the amounts in the far right column													This is your total income							22	490,100