How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask Lev Your Own Question
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28939
Experience:  Taxes, Immigration, Labor Relations
870116
Type Your Tax Question Here...
Lev is online now
A new question is answered every 9 seconds

Passive Losses. In 2010, Julie, a single individual, reported

Resolved Question:

Passive Losses. In 2010, Julie, a single individual, reported the following items of income
and deduction:
Salary $166,000
Interest income 14,000
Long-term capital gain from sales of stock 22,000
Short-term capital losses from sales of stock (17,000)
Loss from a passive rental real estate activity (20,000)
Interest expense on loan to purchase stock (21,000)
Qualified residence interest on residence (12,000)
Charitable contributions ( 8,000)
Property taxes on residence ( 5,000)
Tax return preparation fees ( 2,500)
Unreimbursed employee business expenses ( 2,000)
Julie owns 100% and is an active participant in the rental real estate activity. What is
Julie’s taxable income in 2010?
Submitted: 5 years ago.
Category: Tax
Expert:  Lev replied 5 years ago.

Hi and welcome to Just Answer!
Adjusted gross income:
Salary $166,000
Interest income 14,000
net capital gains 22,000 - 17,000 = $5000
Total $195,000

 

Rental losses are not deductible because a modified adjusted gross income (MAGI) is above $150,000.

 

Itemized deduction:

Interest expense on loan to purchase stock (21,000)
Qualified residence interest on residence (12,000)
Charitable contributions ( 8,000)
Property taxes on residence ( 5,000)

Subtotal - $46,000
Tax return preparation fees ( 2,500)
Unreimbursed employee business expenses ( 2,000)

Subtotal subject of 2% AGI floor limit $4500 - ($195,000 * 2%) = $600

Total - $46,000 + $600 = $46,600

 

Personal exception $3650

Taxable income $195,000 - $46,600 - $3650 = $144,750

Lev and 4 other Tax Specialists are ready to help you