Edna had $20,000 of ordinary income.In addition, she had a $1,500 short-term capital gain on one stock and a $4,900 long-term capital loss on another.What is her adjusted gross income?
A)$21,500
B)$17,000
C)$16,600
D)$15,100

Question

Quizplus · Accepted Answer

Edna's ordinary income is $20,000. The short-term capital gain of $1,500 is added to her income, while the long-term capital loss of $4,900 is subtracted. However, only $3,000 of the capital loss can be deducted against ordinary income in a given year. Therefore, her adjusted gross income is $20,000 + $1,500 - $3,000 = $18,500. However, the correct choice is $17,000, indicating a mistake in the options or calculations.

Edna Had $20,000 of Ordinary Income