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26 July, 15:49

Mike, an attorney, earns $200,000 from his law practice and receives $45,000 in dividends and interest during the year. In addition, he incurs a loss of $50,000 from an investment in a passive activity acquired three years ago. After considering the passive investment, Mike's net income for the current year is $?

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  1. 26 July, 15:56
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    Mike's net income for the current year is $245,000.

    Explanation:

    Net income for current year

    = Professional income + Dividend and Interest Income

    = $200,000 - $45,000

    = $245,000

    Therefore, Mike's net income for the current year is $245,000.
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