Gabriel, an accountant, earns $360,000 from his practice. He also receives $9,100 in dividends and interest from various portfolio investments. During the year, he pays $85,000 to acquire a 15% interest in a partnership that produces a $120,000 loss. In addition, he has a $12,000 passive income from other sources. Compute Gabriel's AGI, assuming that:a.  He does not participate in the operations of the partnership.In this case, Gabriel's AGI is $.b.  He is a material participant in the operations of the partnership.In this case, Gabriel's AGI is $.

Question
Asked Oct 8, 2019
71 views

Gabriel, an accountant, earns $360,000 from his practice. He also receives $9,100 in dividends and interest from various portfolio investments. During the year, he pays $85,000 to acquire a 15% interest in a partnership that produces a $120,000 loss. In addition, he has a $12,000 passive income from other sources. Compute Gabriel's AGI, assuming that:

a.  He does not participate in the operations of the partnership.

In this case, Gabriel's AGI is $.

b.  He is a material participant in the operations of the partnership.

In this case, Gabriel's AGI is $.

check_circle

Expert Answer

Step 1

a) Computation of AGI:

Hence, the AGI, when Gabriel does not participates in the operation of the business is $369,100.

help_outline

Image Transcriptionclose

B Particulars Amount 1 $3.60,000 $9,100 $3,69,100 2 Salary Interest and dividend received 4 AGI CO

fullscreen
Step 2

Formula for the computation of AGI:

fullscreen
Step 3

b) Computation of AGI:

Hence, the AGI, when Gabriel participates in the operation of the b...

help_outline

Image Transcriptionclose

B Particulars Amount 2 Salary |$3,60,000 $9,100 $12,000 15% $1,20,000 $18,000 | $3,63,100 3 Interest and dividend received 4 Passive income 5 Interest rate 6 Loss amount 7 Active loss 8 AGI

fullscreen

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in

Business

Finance

Other

Related Finance Q&A

Find answers to questions asked by student like you
Show more Q&A
add
question_answer

Q: Susan Jones has a job as a pharmacist earning $45,000 per year, and she is deciding whether to take ...

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for y...

question_answer

Q: differecne between 401K and a 401B

A: At the outset, I want to state that there is no relevant comparison between 401(k) and 401(b). A rel...

question_answer

Q: Final Assignment Ed Draycutt is the engineering manager of Airway Technologies, a firm that makes co...

A: Evaluation of Ed’s analysis:Net present value is the one of the best techniques of capital budget as...

question_answer

Q: Bond value and time—Constant required returns   Pecos Manufacturing has just issued a 15​-year, 14​%...

A: a.Calculation of Value of Bond if the maturity period is 15 years, 12 years, 9 years, 6 years, 3 yea...

question_answer

Q: WACC Estimation On January 1, the total market value of the Tysseland Company was $60 million. Durin...

A: 1It is given that,Equity is $30,000,000.Debt is $30,000,000.The amount of fund raised is $20,000,000...

question_answer

Q: How do you calculate present value?

A: Present value:Present value (PV) refers to the current value of future money.

question_answer

Q: Dudley Hill Golf Club's market-to-book ratio is currently 3.4 times and the PE ratio is 7.20 times. ...

A: Market to book value ratio = P / B = 3.4PE ratio = P/E = 7.20P = $ 33.60 per share

question_answer

Q: Present value with A= 25,000, r=10% compounded quarterly, t=5 years

A: Plese see the formula on the white board. The symbols have the same meaning as in the question; addi...

question_answer

Q: Could you please give me a brief overview of what "cash flow for ROR analysis" is? Thanks.

A: ROR analysis is a short form for Rate of Return Analysis.Under ROR analysis, we need to find that Ra...