A married couple files a joint tax return and recognizes a $15,000 net short-ter
ID: 2521170 • Letter: A
Question
A married couple files a joint tax return and recognizes a $15,000 net short-term capital loss and a $9,000 net long-term capital gain during the year. If the couple's only other item of income or deduction is the husband's $82,500 of wages and $2,000 of municipal bond interest, their AGI is:
A. $84,500
B. $81,500 (This was marked incorrect when i submitted)
C. $81,500 (yes, i am aware of the duplicate number, this is how it shows)
D. 79,500 (Edit: This is the correct answer!)
E. None of the above
Explanation / Answer
Solution: $79,500
Working: 82500 - 3000 = 79,500
A deduction can be up to $3,000 per year in net capital losses against the other income. If the net losses is more than this amount, the remainder can be carried over to following years.