Amount of trisha taxable income


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Problem 1) Bill is married and files a joint return. He reports the following items of income and loss for the year:

Salary $120,000
Activity A (passive) 13,000
Activity B (nonbusiness rental real estate) (45,000)

If Bill actively participates in the management of Activity B, what is his AGI for the year and what is the passive loss carryover to next year?

Problem 2) Trisha, a detective who is single, operates a small pottery business in her spare time. In the current year, she reported the following income and expenses from this activity which is classified as a trade or business

Revenue from sale of pottery      9,000
Depreciation on potter's wheel    (3,000)

Property taxes on shed where she does work    (1,200)
Supplies used such as clay, etc.                       (6,500)

In addition, she had salary of $60,000 and itemized deductions, not including those listed above, of $5,100.

What is the amount of Trisha's taxable income assuming the pottery business is classified a trade or business?

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