In the current year Mike reports income and losses from the following activities:

Activity X

$27,000

Activity Y

(16,000)

Activity Z

(23,000)

Salary

175,000

Activities X, Y, and Z are all passive with respect to Mike. Activity Z has $35,000 in passive losses which are carried over from the prior year. In the current year Mike sells activity Z for a taxable gain of $22,000.

Requirement

a. What is the amount of loss that Mike may deduct and what is the amount that must be carried over in the current year? (Enter a "0" for amounts with a zero balance.)

Loss deductible in current year
Amount carried over to next year

Requirement b. Based solely on the amounts above, compute Mike's AGI for the current year.

Mike's AGI for the current year is

.

In Tax Accounting