53. Bruce, who is single, had the following items for the current year Salary of

Question

53. Bruce, who is single, had the following items for the current year Salary of $80,000. Gann of $20,000 on the sale of $1244 stock acquired two years earlier. Loss of $75,000 on the sale of § 1244 stock acquired three years earlier Worthless stock of $15,000. The stock was acquired on February, 1 of the prior year and became worthless on January 15 of the current year. adt toss TG · Determine Bruce's AGI for the current year. 800 0 a. $27,000 b. $38,000 c. $42,000 d. $47,000 e. None of the above ANSWER ATIONALE $80,000 Salary § 1244 ordinary loss Long-term capital gain Long-term capital loss Excess § 1244 loss ($75,000-$50,000) Worthless security Net long-term capital loss (limited to $3,000) Adjusted gross income $20,000 50,000) sano $25,000 15,000 (40.000 (3,000) $27.000

Explanation / Answer

Time adjustment is given to ordinary loss of 75000 . This loss is for 3 years but the deduction will be provided only for 1 year loss

75000/3*2 = 50000 this loss belong two two years and will not be considered therefore only the loss of (75000-50000) i.e 25000 will be taken into consideration

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