In 2010, David had the following transactions: Salary $75,000 Capital loss from

Question

In 2010, David had the following transactions:

Salary                                                                                         $75,000
Capital loss from stock investment                                            ($6,000)
Moving expense to change job                                                  ($12,500)
Received repayment of $9,000 loan he made to a friend in       $9,900
2007 (also interest of $900)
Property taxes on personal residence                                        $1,500

Based on the information given above, determine David's AGI. Be sure to show your work please.

Explanation / Answer

75,000 + 9,900 - 12,500 + 1,500 = 73,900.

Explanation:

$75,000 (salary) - $3,000 (allowable loss on stock investment) - $12,500 (moving expenses) + $900 (interest on loan) = $60,400.

The unused loss of $3,000 from the stock investment sale can be carried over to 2010. The loan repayment of $9,000 is a return of capital and has no effect on gross income.

Property taxes paid on a personal residence is a deduction from AGI (or a standard deduction) and has no impact on the determination of AGI

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