Heather's interest and gains on investments for the current year are as follows:

Heather's adjusted gross income from the above is: or;
Heather must report gross income in the amount of:

Question

Heather's interest and gains on investments for the current year are as follows:
​

Heather's adjusted gross income from the above is: or;
Heather must report gross income in the amount of:
​

Quizplus · Accepted Answer

Heather's adjusted gross income is calculated by adding up all of her sources of income:

- Salary: $24,000 
- Interest income: $1,000 
- Short-term capital gains: $300 
- Long-term capital gains: $100

Total income: $25,400

However, Heather can deduct some expenses from her total income to arrive at her adjusted gross income. Based on the information given, we can assume that Heather is not eligible for any above-the-line deductions (such as contributions to an IRA or student loan interest), so her adjusted gross income will simply be her total income minus any deductions she is eligible for.

The only deduction we are given is for the $100 in long-term capital gains, which are taxed at a lower rate than short-term gains. Subtracting this deduction from Heather's total income, we get:

Adjusted gross income = $25,400 - $100 = $25,300

Therefore, the correct answer is choice C: $1,400.

Heather's Interest and Gains on Investments for the Current Year