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# AGI and partnerships: calculate Teresa's AGI

9. Teresa, an attorney, earns \$300,000 from her practice. During the year, she paid \$50,000 to acquire a 20% interest in a partnership that produces a \$200,000 loss (\$40,000 distributive share to Teresa). She also receives \$35,000 in interest and dividends on other investments. What is Teresa's AGI if she is a material participant in the partnership? What is her AGI if she does not participate in the partnership?

a. \$295,000 if material and \$295,000 if she does not participate
b. \$295,000 if material and \$335,000 if she does not participate
c. \$285,000 if material and \$335,000 if she does not participate
d. \$335,000 if material and \$335,000 if she does not participate

#### Solution Preview

AGI calculation

\$300,000 self employment income
\$35,000 interest and dividends
(\$40,000) partnership loss

\$295,000 AGI, if material participant

\$40,000 passive ...

#### Solution Summary

The solution discloses the full calculation to determine AGI including notes in explanation.

\$2.19