Asked by ashley alvarez on Jun 06, 2024
Verified
Cory sells his entire interest in a rental property in which he actively participated at a gain of $12,000.The activity has a current year loss of $4,800 and $16,000 in prior year suspended losses.During the year,Cory has $80,000 in salary.What is Cory's AGI for the year?
Suspended Losses
Losses that cannot be deducted in the current year and must be carried forward to future years for deduction under certain tax rules.
Actively Participated
Actively Participated refers to a taxpayer's involvement in the operations and decision-making of an investment or business activity, which may affect tax treatment.
- Determine the tax deductibility of losses from rental activities across different income levels.
- Compute the deductibility of passive activity losses and recognize suspended losses.
Verified Answer
AS
Ariana SeguraJun 09, 2024
Final Answer :
$71,200.The gain on the sale of $12,000 would offset the current year loss of $4,800 and a portion of the $16,000 in prior year suspended losses.The remaining $8,800 of prior year suspended losses would then be available to offset Cory's active income.
Learning Objectives
- Determine the tax deductibility of losses from rental activities across different income levels.
- Compute the deductibility of passive activity losses and recognize suspended losses.
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