Alice is an attorney and earned $175,000 from her practice in the current year.Alice also owns three passive activities.The activities had the following income and losses: $\begin{array} { l l }
\text { Partrnership A } & \$ 40,000 \
\text { Partnership B } & \$ ( 32,000 ) \
\text { Partnership C } & \$ ( 24,000 )
\end{array}$ What is Alice's adjusted gross income for the current year?
A)$119,000.
B)$159,000.
C)$175,000.
D)$215,000.

Question

Alice is an attorney and earned $175,000 from her practice in the current year.Alice also owns three passive activities.The activities had the following income and losses: $\begin{array} { l l } 
\text { Partrnership A } & \$ 40,000 \
\text { Partnership B } & \$ ( 32,000 ) \
\text { Partnership C } & \$ ( 24,000 )
\end{array}$ What is Alice's adjusted gross income for the current year?
A)$119,000.
B)$159,000.
C)$175,000.
D)$215,000.

Quizplus · Accepted Answer

Alice's adjusted gross income (AGI) would be $175,000, which is her earnings from her practice. The income and losses from passive activities (partnerships A, B, and C) are not considered in calculating AGI because they are treated separately and can only offset income from other passive activities, not active income like her attorney earnings.

Alice Is an Attorney and Earned $175,000 from Her Practice