How to calculate MAGI with capital losses for Roth Contribution?

[buns2]

Hello Turbotax Community!

I am wrapping up taxes for my girlfriend. I am confused with the MAGI calculation. Multiple sources mentioned that passive loss (capital losses?) should be added back to the adjusted gross income (AGI) [see source 1 below]. Does this mean it will "increase" MAGI? For example, say I have an AGI of $100,000, and a capital loss of 3k. Does it mean MAGI = $103,000? In other words MAGI > AGI?

Yet, I have also read that capital losses should REDUCE MAGI. [see source 2 below]. For example, say I have an AGI of $100,000, and a capital loss of 3k. Does it mean MAGI = $97,000? In other words MAGI < AGI?  

I am assuming it is the FORMER because AGI includes capital losses already, thus we should be adding it back? So in theory MAGI should usually be higher than AGI? My girlfriend is trying to contribute to her Roth IRA, but is at the threshold so this is critical. 

Lastly, would anyone know where I can find a "reduced" ROTH IRA contribution calculator? 

Source 1

https://www.thebalance.com/how-to-calculate-your-modified-adjusted-gross-income-4047216

Source 2

https://www.rothira.com/ways-reduce-taxable-income-roth-ira

[dmertz]

Source 1 is inaccurate.  There is no direct add back of passive losses to compute AGI.  However, there might be is an effect on allowable passive losses that have an AGI-based phase-out.

Go to the authoritative source, IRS Pub 590-A:

https://www.irs.gov/publications/p590a#en_US_2018_publink1000230985

TurboTax's implementation of the calculation of MAGI for the purpose of a Roth IRA contribution is based on the IRS instructions.

[dualinco]

Turbo Tax Support clarified for me that "passive income or loss" does NOT refer to capital losses from stocks.

Passive activity loss (PAL) refers to trade, business, or rental activities.

[dmertz]

There are many different ways to modify AGI for different purposes.  The original question was asking about the MAGI for eligibility to contribute to a Roth IRA and for this purpose there is no add-back of any kind of loss.