Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a ($24,500) loss; however, Michelle has sufficient tax basis and at-risk amounts to absorb the loss. If Michelle has $132,000 of salary, $11,900 of long-term capital gains, $4,900 of dividends, and no additional sources of income or deductions, how much loss can Michelle deduct?

Ashburn reported a $105,050 net §1231 gain in Year 6. Assuming Ashburn reported $59,000 of nonrecaptured §1231 losses during Years 1 to 5, what amount of Ashburn’s net §1231 gain for Year 6, if any, is treated as ordinary income?

Jamie is single. In 2026, she reported $100,600 of taxable income, including a long-term capital gain of $6,200. What is her gross tax liability? (Use the tax rate schedules (opens in a new tab), long-term capital gains tax brackets (opens in a new tab).) Note: Round your answer to the nearest whole dollar amount.

Which of the following decreases the benefits of accelerating deductions?

Jamison’s gross tax liability is $8,950. Jamison had $2,410 of available credits and he had $5,450 of taxes withheld by his employer. What are Jamison’s taxes due (or taxes refunded) with his tax return?

Sabina recently was sickened by eating spoiled peanut butter. She successfully sued the manufacturer for her medical bills ($3,940), her emotional distress ($8,150—she now fears peanut butter), and punitive damages ($58,750). What amount must Sabina include in her gross income?

Nontax factor(s) investors should consider when choosing among investments include:

Manny, a single taxpayer, earns $70,000 per year in taxable income and an additional $12,500 per year in city of Boston bonds. What is Manny’s current marginal tax rate for 2026? (Use tax rate schedule (opens in a new tab).)

Wheeler LLC purchased two assets during the current year (a full 12-month tax year). On November 16 Wheeler placed in service computer equipment (five-year property) with a basis of $22,000 and on April 20 placed in service furniture (seven-year property) with a basis of $15,200. Calculate the maximum depreciation expense (ignoring §179 and bonus depreciation). (Use MACRS Table 2 (opens in a new tab).) Note: Round final answer to the nearest whole number.

Barney and Betty got divorced in 2018. In the divorce decree, Betty agreed to pay Barney $52,600 per year for twenty years (or until Barney’s death or remarriage) and $13,000 per year until their daughter, Pebbles, turns 19 years old. What amount (if any) is included in Barney’s gross income in 2026?