An individual taxpayer has the following property transactions during the current year: Personal automobile owned 3 years $4,000 loss on sale
Business equipment owned 3 years $5,600 gain on sale
Factoring of receivables $6,200 loss
Common stock owned 7 months $3,500 gain on sale
How do these transactions affect the individual's AGI?
A)AGI is increased by $2,900
B)AGI is decreased by $1,100
C)AGI is increased by $9,100
D)AGI is decreased by $2,900
E)None of the above

Question

Quizplus · Accepted Answer

The gain from the sale of business equipment ($5,600) and the gain from the sale of common stock ($3,500) increase AGI. The loss from factoring receivables ($6,200) is deductible and decreases AGI. The personal automobile loss is not deductible. Net effect: $5,600 + $3,500 - $6,200 = $2,900 increase in AGI.

An Individual Taxpayer Has the Following Property Transactions During the Current