next to any ordinary income or loss ST hext to any term capi

next to any ordinary income or loss, ST hext to any term capital gain or loss: Eloise, an amateur inyesfor, had the following investments outcomes Below write o short term capital gain or loss LT next to long Dry eleaner which she had lent $10.000 fled for bankruptcy, For good reason, she does not expect to recover any money on this unsecured loan. for bankruptey. For good reason, she does not S1244 Qualified Small Business in which she purchased$ 15,000 of certified stock went bankrupt. The CEO of company has told her the stock is worthtess and she believes him. She purchased Apple stock in January and sold it a month Iater for a gain of $12,000 S L She sold General Electric stock that she had purchased few years earlier for a loss of $20,000 LShe received $5,000 interest payment on a corporate bond. Eloise has salary income of $100,000. Calculate her AGI ditures eligible for iemized deduction Qe. from AGI) as a medical Place a ign ore AGI threshold and assume no insurance reimbursement Surger y to make an actor more attractive, and hopefully, to increase his earning potential. mental cancer treatment that will require $100,000 of unproven drugs

Solution

Bad debt of dry cleaner- ST

It can be deducted as casualty loss or ordinary loss, if not deducted then the assessee should wait for an year the amount of the actual loss is determined and deduct it as non business bad debt in that year. Report it as short term capital loss on form 8949.

Qualified small business stock - 0

As there is no real decline in value, it is just a mere statement.

Apple stock sold a month later- ST

As it is sold a month later only

General electric stock- LT

as it is sold a few years later

Interest on corporate bond- LT

Calculation of AGI

100,000+12,000+5,000-10,000-20,000

87,000

(In the above calculation salary is adjusted with capital gains and losses in order to compute AGI)