Xinran, who is married and files a joint return, owns a grocery store. In 2021, his...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Xinran, who is married and files a joint return, owns a grocery store. In 2021, his gross sales were $276,000, and his operating expenses were $320,000. Other items on his 2021 return were as follows: Nonbusiness capital gains (short-term) $20,000 Nonbusiness capital losses (long-term) 9,000 Itemized deductions 18,000 Ordinary nonbusiness income 8,000 Salary from part-time job 10,000 In 2022, Xinran provides the following information: Net business income $60,000 Salary (spouse) 25,000 Interest income 2,000 Adjusted gross income $87,000 Less: Itemized deductions* Charitable contributions (cash) $35,000 Medical expenses of $6,925 [limited to the amount in excess of 7.5% of AGI ($6,925 - $6,525)] 400 Total itemized deductions $35,400 * The 2021 married filing jointly standard deduction is $25,100; Xinran's itemized deductions will exceed the 2022 standard deduction (after adjustment for inflation). a. Compute Xinran's taxable income (or loss) for 2021? 2021 Net business income/loss from grocery store -44,000 Salary 10,000 Ordinary nonbusiness income 8,000 Net short-term capital gain 11,000 $ Adjusted gross income/loss -15,000 Less: MFJ standard deduction 25,100 Less: Deduction for qualified business income Loss Feedback Check My Work b. Compute Xinran's NOL for 2021. %24 c. Determine Xinran's taxable income for 2022. 2022 (1) Determine taxable income before application of the NOL: Net business income 60,000 Salary 25,000 Interest income 2,000 Adjusted gross income Less: Itemized deductions: Less: Deduction for qualified business income: Grocery store Taxable income (2) Determine the NOL deduction: 1. The NOL carryforward s or 2. B0% of taxable income computed in step 1: $ (3) Determine final taxable income: Net business income Salary Interest income NOL deduction Adjusted gross income Less: Itemized deductions Charitable contributions Medical expenses Less: Deduction for qualified business income: Grocery store Taxable income Xinran, who is married and files a joint return, owns a grocery store. In 2021, his gross sales were $276,000, and his operating expenses were $320,000. Other items on his 2021 return were as follows: Nonbusiness capital gains (short-term) $20,000 Nonbusiness capital losses (long-term) 9,000 Itemized deductions 18,000 Ordinary nonbusiness income 8,000 Salary from part-time job 10,000 In 2022, Xinran provides the following information: Net business income $60,000 Salary (spouse) 25,000 Interest income 2,000 Adjusted gross income $87,000 Less: Itemized deductions* Charitable contributions (cash) $35,000 Medical expenses of $6,925 [limited to the amount in excess of 7.5% of AGI ($6,925 - $6,525)] 400 Total itemized deductions $35,400 * The 2021 married filing jointly standard deduction is $25,100; Xinran's itemized deductions will exceed the 2022 standard deduction (after adjustment for inflation). a. Compute Xinran's taxable income (or loss) for 2021? 2021 Net business income/loss from grocery store -44,000 Salary 10,000 Ordinary nonbusiness income 8,000 Net short-term capital gain 11,000 $ Adjusted gross income/loss -15,000 Less: MFJ standard deduction 25,100 Less: Deduction for qualified business income Loss Feedback Check My Work b. Compute Xinran's NOL for 2021. %24 c. Determine Xinran's taxable income for 2022. 2022 (1) Determine taxable income before application of the NOL: Net business income 60,000 Salary 25,000 Interest income 2,000 Adjusted gross income Less: Itemized deductions: Less: Deduction for qualified business income: Grocery store Taxable income (2) Determine the NOL deduction: 1. The NOL carryforward s or 2. B0% of taxable income computed in step 1: $ (3) Determine final taxable income: Net business income Salary Interest income NOL deduction Adjusted gross income Less: Itemized deductions Charitable contributions Medical expenses Less: Deduction for qualified business income: Grocery store Taxable income
Expert Answer:
Answer rating: 100% (QA)
a The Loss of Xinran for the year 2021 is 600000 b The Xinran NOL for 2021 is 4400000 c 1 The Tax... View the full answer
Related Book For
South Western Federal Taxation Individual Income Taxes 2018
ISBN: 9781337385893
41st edition
Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young, Nellen
Posted Date:
Students also viewed these accounting questions
-
In 2014, Juanita is married and files a joint tax return with her husband. What is her tentative minimum tax in each of the following alternative circumstances? a. Her AMT base is $100,000, all...
-
In 2017, Juanita is married and files a joint tax return with her husband. What is her tentative minimum tax in each of the following alternative circumstances? a. Her AMT base is $100,000, all...
-
In 2015, Juanita is married and files a joint tax return with her husband. What is her tentative minimum tax in each of the following alternative circumstances? a) Her AMT base is $100,000, all...
-
Start with the partial model in the file Ch19 P08 Build a Model.xls on the textbooks Web site. Maggies Magazines (MM) has straight nonconvertible bond that currently yield 9%. MMs stock sells for $22...
-
In the illustration in Problem 25, what would the tax rate on equity income need to be for debt to not have an effect on value?
-
1. If you were the owner or manager of a restaurant, would you have used Disheros service? Why or why not? 2. What, if anything, could Disheros co-founders have done in advance of launching the...
-
Explain why employers should place disclaimers in employee handbooks.
-
Following is selected information from the balance sheet for Flaps Inc. Solve for the missing amounts for each of the five years. Year 2016 2017 2018 2019 2020 Total liabilities and stockholders...
-
Image transcription text 1. [#851] Two students 1 point In the queue at the bus stop, two students (with masses 80 and 60 kg respectively) are standing a distance 0.7 m apart. What is the magnitude...
-
Write a letter to the Smith's discussing the results of their tax return, remind them of any deduction substantiation rules they need to follow (receipts, mileage log, etc.), offer suggestions for...
-
1) What is the relationship between appropriate executive style, firm size, and complexity? 2) Why did Scott McNealys inflexible management style shift from being very successful in Sun Microsystems...
-
What goodwill techniques can you use in routine messages?
-
Assume that you work in an academic department at your school as a work study student, and your department chairperson wants to enhance communication with all students through social media. Currently...
-
What is the purpose of an executive summary? What kind of information does it include?
-
Why should you leave some time between the composing and evaluating stages?
-
How does comprehension differ from interpretation?
-
How does a mechanized proof best solve security with smart contracts? a. By allowing smart contracts to be edited. b. By mathematically proving a smart contract will execute consistently with the...
-
For each of the following reactions, express the equilibrium constant: a) H20 (I) H2 (g) + 02 (g) Ke = 1.0x107 b) Fe2 (g) 2F (g) Ke= 4.9 x 10-21 c) C (s) + O2 (g) d) H2 (g) + C2H4 (g) C2H6 (g) Ke =...
-
Determine whether each of the following independent statements best applies to a defined contribution plan(DCP), a defined benefit plan (DBP), both(B), or neither (N): a. The amount to be received at...
-
Samuel and Annamaria are married, file a joint return, and have three qualifying children. In 2017, they earn wages of $34,000 and no other income. Determine the amount of their earned income credit...
-
Shen purchased corporate stock for $20,000 on April 10, 2015. On July 14,2017, when the stock was worth $12,000, Shen died and his son, Mijo, inherited the stock. Mijo sold the stock for $14,200 on...
-
Determine the probability mass function of \(X\) from the following cumulative distribution function: \[ F(x)=\left\{\begin{array}{lr} 0 & x. \] Figure 3.3 displays a plot of \(F(x)\). From the plot,...
-
Two new product designs are to be compared on the basis of revenue potential. Marketing believes that the revenue from design A can be predicted quite accurately to be \(\$ 3\) million. The revenue...
-
The probability that a wafer contains a large particle of contamination is 0.01. If it is assumed that the wafers are independent, what is the probability that exactly 125 wafers need to be analyzed...
Study smarter with the SolutionInn App