Question

Ms. Turney owns a one-half interest in an apartment complex, which is her only passive activity. The complex operated at a $53,000 loss this year. In addition to her share of this loss, Ms. Turney had the following income items: Salary $ 59,000 Interest and dividends 4,400 Compute her AGI. Compute her AGI if her salary was $113,400 rather than $59,000. Compute her AGI if her salary was $168,250 rather than $59,000.

Answer 1

Ans: AGI= Salary+ Interest and dividends-Real Estate rental Loss

=> 59,000+4,400-25,000 { for Current Year, limit is $25,000 for Real Estate rental Loss}

=> 38,400

B). AGI if Salary Was $113,400 rather than 59,000

=> AGI before Real Estate Rental Loss= Salary+ Interest and Dividends

=> 113,400+4,400

=> 117,800

Real Estate Rental Loss- 25,000- 50% of AGI excess over $100,000

=> 25,000- 50% of {117,800-100,000}

=> 25,000- 8,900

=> 16,100

Ms. Turney AGI= AGI before Real Estate Rental Loss- Real Estate Rental Loss

=> 117,800-16,100

=> 101,700

C). AGI if her salary was $168,250 rather than $59,000 : As per the Law An Individual Earning more than $150,000 phase limit are not eligible for Deduction of Rental Loss

Ms. Turney AGI= $168,250+4,400

=> 172,650