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

Customer Question
the following items of income and...
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: 6 years ago.Category: Tax
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Answered in 15 hours by:
8/1/2011
Tax Professional: Lev, Tax Advisor replied 6 years ago
Lev
Lev, Tax Advisor
Category: Tax
Satisfied Customers: 30,724
Experience: Taxes, Immigration, Labor Relations
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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
Lev, Tax Advisor
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