Use the following information about Q Corporation, an apartment rental company with three shareholders. $\begin{array}{lr}\text { Interest income }&\$15,000\
\text { Gross rental income }&16,000\
\text { Depreciation, property taxes, and interest expense related to rental }\
\text { income } & 18,000 \
\text { Maintenance and utilities related to rental income } & 4,000 \
\text { Dividends paid during the current year } & 7,000
\end{array}$ What is the adjusted ordinary gross income for Q Corporation?

Question

Quizplus · Accepted Answer

The adjusted ordinary gross income for Q Corporation is calculated by adding the interest income ($15,000) to the gross rental income ($16,000) and then subtracting the expenses related to the rental income (depreciation, property taxes, interest expense, maintenance, and utilities totaling $18,000 + $4,000 = $22,000). This results in $15,000 + $16,000 - $22,000 = $9,000. However, dividends paid are not deducted in calculating ordinary gross income, so the correct answer is $15,000 (interest income) + $16,000 (gross rental income) = $31,000, before subtracting expenses. The expenses and dividends are not relevant to the calculation of adjusted ordinary gross income in this context.

Use the Following Information About Q Corporation, an Apartment Rental