John Files a Return as a Single Taxpayer

question 41

Multiple Choice

John files a return as a single taxpayer.In 2019, he had the following items:
? Salary of $40,000.
? Loss of $65,000 on the sale of § 1244 stock acquired two years ago.
? Interest income of $6,000.
Determine John's AGI for 2019.

• A)($5,000).
• B)$0.
• C)$45,000.
• D)$51,000.
• E)None of these.

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Definitions:

Compound Interest

This approach to interest calculation includes both the initial principal amount and the compounded interest from earlier stages of a deposit or borrowing.

Bonds Payable

Long-term liabilities representing money a company must pay back to bondholders, typically including principal and interest.

Semiannual Interest

Interest that is calculated and paid twice a year on an investment or loan.

Bond Discount

The contrast in value between what a bond is worth in terms of its face value and the lesser amount it is sold for in the market.