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Compute Mr. Earl's AGI.

Compute Mr. Earl's AGI.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In 2005, Mr. Earl, a single taxpayer, contributed $45,000 in exchange for 500 shares of DB stock. In 2008, he paid $40,000 to another shareholder to purchase 1,000 more DB shares. All DB's stock qualified as Section 1244 stock when it was issued. This year, Mr. Earl sold all 1,500 DB shares for $16 per share. His only income item was his $80,000 salary. Assume the taxable year is 2022. Required: a. Compute Mr. Earl's AGI. b. What is Mr. Earl's AGI if he also recognized a $20,000 capital gain on the sale of other securities?
Transcribed Image Text:In 2005, Mr. Earl, a single taxpayer, contributed $45,000 in exchange for 500 shares of DB stock. In 2008, he paid $40,000 to another shareholder to purchase 1,000 more DB shares. All DB's stock qualified as Section 1244 stock when it was issued. This year, Mr. Earl sold all 1,500 DB shares for $16 per share. His only income item was his $80,000 salary. Assume the taxable year is 2022. Required: a. Compute Mr. Earl's AGI. b. What is Mr. Earl's AGI if he also recognized a $20,000 capital gain on the sale of other securities?
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