Question

Michael and Sarah had the following income and expenses during the year:
• $46,000 in wages
• $48,000 in rental income
• $8,000 in rental expenses
• $24,000 in self-employment receipts
• $12,000 in self-employment expenses
Assuming there are no income adjustments, what is their California adjusted gross income?
$98,000
$106,000
$110,000
$118,000

Answer 1

$98,000

Calculation:
- Wages: $46,000
- Net rental: $48,000 − $8,000 = $40,000
- Net self‑employment: $24,000 − $12,000 = $12,000
Total AGI = $46,000 + $40,000 + $12,000 = $98,000.