Question - Tonya had the following items for last year:

Salary $40,000

Short-term capital gain 12,000

Non-business bad debt (10,000)

Long-term capital loss (5,000)

For the current year, Tonya had the following items:

Salary $45,000

Collection of last year's bad debt 10,000

Determine Tonya's adjusted gross income for the current year.

I know that the income is limited to the tax benefit from the prior year, but I am unsure of the tax benefit of the prior year, whether you would use all the of $10,000 or if it's limited to the $3,000 capital loss limit.

The test is due tonight, so quick answer please!!!