Carlos, age 55, is married with no children. During the year, Carlos had the following income and...


Carlos, age 55, is married with no children. During the year, Carlos had the following income and expense items:

A. In April last year, he purchased some Alpha Corporation stock for $5,000. In March of this year, Alpha Corporation was declared bankrupt and Carlos was notified that his shares of stock are worthless.

B. Several years ago, Carlos purchased some qualified small business stock for $120,000. This year, he sold the stock for $50,000.

C. In July of this year, Carlos sold some land he has held for two years. He had paid $42,000 for the land and sold it for $60,000.

D. In September, Carlos's home was damaged by an earthquake. His basis in his home is $430,000. The value of the home immediately before the quake was $610,000. After the earthquake, the home is worth $530,000. Because the quake was an excluded item on his homeowner's insurance policy, he received no insurance payment.

E. Carlos owned 100 shares of Magenta Corporation stock with an adjusted basis of $15,000. On December 15, 2014, he sold the stock for $12,000. On January 5, 2015, he purchased 150 shares of Magenta stock for $12,750. Then on December 30, 2015, he sold all 150 shares for $14,000.

F. Carlos had itemized deductions (not including any item above) of $15,000. G. Carlos has a salary of $100,000.

Required: Calculate Carlos's taxable income. For items A through E, show details of how you determined gain or loss. If any cannot be used, indicate whether it is carried-back or carried-forward.

Taxable income

Taxable income is defined as the amount of money paid by a person or some company to the government in particular period of time . it is also known as gross income.

Answer and Explanation:

Particulars Amount $
Salary 100,000
Long term capital loss (5,000)

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Learn more about this topic:

How to Calculate Corporate Taxable Financial Income

from Accounting 202: Intermediate Accounting II

Chapter 8 / Lesson 2

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