Sally owns stock in two partnerships: Able Partners and 321Associates This year,

Question

Sally owns stock in two partnerships: Able Partners and 321Associates This year, Sally had the following income and loss items.
         Salary   $75,000
         Business income from Able     $20,000
         Business loss from 321Associates ($35,000)

Salary - $75000

Business Income from Able - $20000

Business loss from 321Associates - ($35000)

If Sally materially participates in 321Associate's business but not in Able's business, calculate her AGI.

$75,000

$95,000

$60,000

$40,000

$75,000

$95,000

$60,000

$40,000

Explanation / Answer

Adjusted Gross Income (AGI) = Total Income - Deductions

= (75000 + 20000) - 35000

But Sally does not participates in Able's business Then AGI = 75000 - 35000

= $40,000

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