During the year, Mark reports $90,000 of active business income from his law practice. He also owns two passive activities. From Activity A, he earns $20,000 of income, and from Activity B, he incurs a $30,000 loss. As a result, Mark
A. reports AGI of $80,000.
B. reports AGI of $90,000 with a $10,000 loss carryover.
C. reports AGI of $90,000 with a $30,000 loss carryover.
D. reports AGI of $110,000 with a $30,000 loss carryover.
He has to report the full amount of income from his law practice, which is $90,000. He cannot reduce his income from the actual amount that was made. The AGI of $90,000 would be reported. Losses from passive ...
This solution provides the correct answer with explanation to the active business income question listed. The correct amounts for AGI and for the loss carryover are both calculated and explained.