Bowden is a single individual and has the following income (loss) for the current tax year:
?
$$\begin{array} { l r }
\text { Salary } & \$ 85,000 \
\text { Dividends and interest } & 24,000 \
\text { Actively managed rental property } & ( 23,000 )
\end{array}$$
What is Bowden's adjusted gross income for this year?

Question

Bowden is a single individual and has the following income (loss) for the current tax year:
?
$$\begin{array} { l r } 
\text { Salary } & \$ 85,000 \
\text { Dividends and interest } & 24,000 \
\text { Actively managed rental property } & ( 23,000 )
\end{array}$$
What is Bowden's adjusted gross income for this year?

Quizplus · Accepted Answer

Adjusted gross income is calculated by subtracting above the line deductions from gross income. In this case, Bowden's gross income is $100,000 and his above the line deduction is $11,500 ($10,000 for IRA contribution and $1,500 for student loan interest). So Bowden's adjusted gross income is $88,500 ($100,000 - $11,500). Therefore, the correct answer is C).

Bowden Is a Single Individual and Has the Following Income