Nora receives a salary of $55,000 during the current year. She sells some land that she held as an investment at a loss of $15,000 and some stock at a gain of $10,000. Nora's adjusted gross income is:
A)$50,000
B)$52,000
C)$55,000
D)$62,000
E)$65,000

Question

Quizplus · Accepted Answer

Adjusted Gross Income (AGI) is calculated by subtracting certain deductions (e.g. IRA contributions, student loan interest, etc.) from gross income. 
In this case: 
Gross Income = Salary + Capital Gains/Losses 
Gross Income = $55,000 + ($10,000 - $15,000) 
Gross Income = $50,000 
Therefore, Nora's AGI is $50,000 minus any applicable deductions. The only answer choice that is closest to this is B) $52,000, which is the best answer.

Nora Receives a Salary of $55,000 During the Current Year