Martha has $40,000 AGI without considering the following information. During the year, she incurs a LTCL of

Question:

Martha has $40,000 AGI without considering the following information. During the year, she incurs a LTCL of $10,000 and has a gain of $14,000 due to the sale of a capital asset held for more than a year.
a. If the $14,000 gain is not properly classified as a LTCG (i.e., is improperly treated as an ordinary gain), determine Martha’s AGI.
b. If the $14,000 gain is properly classified as a LTCG, determine her AGI.
c. If Martha has a $2,500 STCL carryover from earlier years, how would the answers to Parts a and b be affected?