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Klaus, a certified public accountant, earns $189,000 from his practice. He also receives $4,300 in dividends and

interest from various portfolio investments. During the year, he pays $40,000 to acquire a 25% interest in a partnership that produces a $175,000 loss for the year. He has $3,000 of passive income from other sources. Compute Klaus's AGI, assuming that:

a. He does not participate in the operations of the partnership.

In this case, Klaus's AGI is $.

b. He is a material participant in the operations of the partnership.

In this case, Klaus's AGI is $

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