Yolanda,a single taxpayer,has W-2 income of $87,500.She also has a short-term capital loss of $7,000,a short-term capital gain of $1,000,and a long-term capital gain of $2,000.What is Yolanda's AGI for 2016?
A)$90,500.
B)$89,500.
C)$84,500.
D)$83,500.

Question

Quizplus · Accepted Answer

To calculate Yolanda's AGI, we need to subtract her capital losses from her capital gains. So, her net short-term capital loss is $6,000 ($7,000 loss - $1,000 gain) and her net capital gain is $2,000. Therefore, her total capital gain for tax purposes is $2,000 - $6,000 = -$4,000. She can use up to $3,000 of the capital loss to offset her other income, leaving a carryforward loss of $1,000 to use in future years.

So, Yolanda's AGI is:
$87,500 (W-2 income) - $3,000 (capital loss used to offset income) - $1,000 (standard deduction for a single taxpayer) = $83,500.

Therefore, the correct answer is C, $84,500.

Yolanda,a Single Taxpayer,has W-2 Income of $87,500