Ms. Adams owns an interest in ABCD Partnership, which is a passive activity. At the beginning of the year, she projects that her share of ABCD’s business loss will be $16,000 and that she will have the following additional items.

Net profit from her consulting business ...................................... $75,000
Deduction for SE tax .......................................................................    (5,299)
Interest and dividends ....................................................................     1,500

Ms. Adams plans to buy a rental house that should generate $9,500 income this year. Compute her AGI and the tax cost of her projected rent income.

Assume the taxable year is 2018.