For the Current Year, David Has Wages of $80,000 and the Following

question 138

Multiple Choice

For the current year, David has wages of $80,000 and the following property transactions: $\begin{array}{lr}\text { Stock investment sales- }\\\text { Long-term capital gain } & \$ 9,000 \\\text { Short-term capital loss } & (12,000) \\\text { Loss on sale of camper (purchased 4 years ago and used for family vacations) } & (2,000) \end{array}$ 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.

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Definitions:

AGI Deduction

Adjustments made to gross income to calculate the adjusted gross income (AGI), which can include contributions to retirement accounts, student loan interest, and other eligible deductions.

FICA Taxes

FICA taxes are federal payroll taxes collected to fund Social Security and Medicare, divided into equal parts paid by employers and employees.

Student Loan Interest

The cost incurred from borrowing funds for education, which can often be deducted from taxable income under certain conditions in many tax jurisdictions.

Deduction Limit

The maximum amount that can be subtracted from taxable income for certain expenses, beyond which deductions are no longer permitted or are reduced.