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FinanceQ&A LibraryGabriel, 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

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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 $.

Step 1

**a) Computation of AGI:**

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

Step 2

**Formula for the computation of AGI:**

Step 3

**b) Computation of AGI:**

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

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