Question
Alex, single, earns wags of $42,000 in 2026. He also conducts an activity that produces the following revenues and expenses: Revenues $18,000 Expenses Property taxes
Alex, single, earns wags of $42,000 in 2026. He also conducts an activity that produces the following revenues and expenses:
Revenues $18,000
Expenses
Property taxes 3,000
Materials and supplies 4,500
Utilities 2,000
Advertising 5,000
Insurance 750
Cost Recovery 8,000
Alex also pays mortgage interest during the year of $8,000. Assume Congress passes no new tax laws between now and 2026 and that there are no relevant inflation adjustments.
1. Assuming the activity is a business, Alex' 2026 AGI is $ and his taxable income (ignoring the personal exemption) is $.
2. Assuming the activity is NOT a business, Alex' 2026 AGI is $ and his taxable income (ignoring the personal exemption) is $.
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