Passive Losses. In 2010, Julie, a single individual, reported the following item
ID: 2380027 • Letter: P
Question
Passive Losses. In 2010, Julie, a single individual, reported the following items of incomeand deduction:
Salary $166,000
Interest income 14,000
Long-term capital gain from sales of stock 22,000
Short-term capital losses from sales of stock (17,000)
Loss from a passive rental real estate activity (20,000)
Interest expense on loan to purchase stock (21,000)
Qualified residence interest on residence (12,000)
Charitable contributions ( 8,000)
Property taxes on residence ( 5,000)
Tax return preparation fees ( 2,500)
Unreimbursed employee business expenses ( 2,000)
Julie owns 100% and is an active participant in the rental real estate activity. What is
Julie’s taxable income in 2010?
Explanation / Answer
Interest income -----------14,000
Salary ===========$166,000
net capital gain= $166,000 -17,000 = 5,000
total----------------------$195,000
Long-term capital gain from sales of stock 22,000
Short-term capital losses from sales of stock (17,000)
Loss from a passive rental real estate activity (20,000)
Interest expense on loan to purchase stock (21,000)
Qualified residence interest on residence (12,000)
Charitable contributions ( 8,000)
Property taxes on residence ( 5,000)
Tax return preparation fees ( 2,500)
Unreimbursed employee business expenses ( 2,000)
2%------------- =600
total= 46,000 +600 =46,600
ulie’s taxable income in 2010?
=$195,000---46,600 ---persomal expenses= 144 750