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Mary, a single taxpayer, purchased 10,000 shares of 1244 stock several years ago at a cost of $20 per share. In November of the current year, Mary received an offer to sell the stock for $12 per share. She has the option of either selling all of the stock now or selling half of the stock now and half of the stock in January of next year. Mary will receive a salary of $80,000 for the current year and $90,000 next year. Mary will have long-term capital gains of $8,000 for the current year and $10,000 next year.

If Mary's goal is to minimize her AGI for the two years, determine whether she should sell all of her stock this year or half of her stock this year and half next year.

Determine Mary's total AGI under both options for the current year and next year. (If any amount is zero, enter 0.)

Sell all of the stock this year: Current year's AGI Salary $80,000 SelectOrdinary lossOrdinary incomeCorrect 3 of Item 1 $ Long-term capital gain $8,000 Less: Selectlong-term capital lossshort-term capital lossCorrect 5 of Item 1 $ Equals: Selectnet long-term capital lossnet short-term capital lossnet long-term capital gainnet short-term capital gainCorrect 7 of Item 1 $ SelectDeductible net long-term capital lossDeductible net short-term capital lossCorrect 9 of Item 1 $ Adjusted gross income $ SelectNet long-term capital loss carryoverNet short-term capital loss carryoverCorrect 12 of Item 1 $ Next year's AGI Salary $90,000 Long-term capital gain $10,000 Less: Selectnet long-term capital loss carryovernet short-term capital loss carryoverCorrect 14 of Item 1 $ Equals: Selectnet long-term capital loss (before limitation)net short-term capital loss (before limitation)net long-term capital gainnet short-term capital gainCorrect 16 of Item 1 $ SelectDeductible net long-term capital lossDeductible net short-term capital lossCorrect 18 of Item 1 $ Adjusted gross income $ Total AGI Current year $ Next year Total $ Sell half of the stock this year and half next year: Current year's AGI Salary $80,000 SelectOrdinary lossOrdinary incomeCorrect 24 of Item 1 $ Long-term capital gain $8,000 Less: Selectno capital losslong-term capital lossshort-term capital lossCorrect 26 of Item 1 $ Equals: Selectnet long-term capital gainnet short-term capital lossnet long-term capital lossnet short-term capital gainCorrect 28 of Item 1 $ SelectTaxable net long-term capital gainDeductible net long-term capital lossCorrect 30 of Item 1 $ Adjusted gross income $ Next year's AGI Salary $90,000 SelectOrdinary lossOrdinary incomeCorrect 33 of Item 1 $ Long-term capital gain $10,000 Less: Selectno capital losslong-term capital lossshort-term capital lossCorrect 35 of Item 1 $ SelectTaxable net long-term capital gainDeductible net long-term capital lossCorrect 37 of Item 1 $ Adjusted gross income $ Total AGI Current year $ Next year Total $

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