For the current year, David has wages of $80,000 and the following property transactions:
Stock investment sales—
Long-term capital gain $ 9,000
Short-term capital loss (12,000)
Loss on sale of camper (purchased 4 years ago and used for family vacations) (2,000)
What is David's AGI for the current year?
a. $76,000.
b. $77,000.
c. $78,000.
d. $89,000.
e. None of these.
b
RATIONALE: The loss from the sale of the camper is personal and, therefore, is not deductible. Netting the short-term capital loss of $12,000 against the long-term capital gain of $9,000 produces a net short-term capital loss of $3,000 . Offsetting the capital loss against ordinary income yields AGI of $77,000 ($80,000 – $3,000).
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