Question

(CO 4) Jane files a tax return as a single taxpayer. She had the following items in 2018: Salary of $80,000 Interest income of $2,000 Loss of $70,000 on the sale of Section 1244 acquired 2 years ago What should be Jane's AGI for 2018? $82,000 $70,000 $12,000 $32,000

Answer 1

Correct answer is option d. $32000

Salary Income	$ 80,000
Interest Income	$ 2000
Total Income'	$ 82,000
Less: Ordinary loss (§ 1244 ordinary loss)	($ 50,000 )
AGI	$32,000

Note:

Under section 1244 , losses from the sale of stock is deducted as an ordinary losses instead of as capital losses.

For 2018 , a single taxpayer can deduct the losses amount upto $50,000.