Question: Gus, who is married and files a joint return, owns a grocery store. In 2016, his gross sales were $276,000, and operating expenses were $320,000.
Gus, who is married and files a joint return, owns a grocery store. In 2016, his gross sales were $276,000, and operating expenses were $320,000. Other items on his 2016 return were as follows:
Nonbusiness capital gains (short term)..........................................$20,000
Nonbusiness capital losses (long term)..............................................9,000
Itemized deductions (no casualty or theft) .......................................18,000
Ordinary nonbusiness income..............................................................8,000
Salary from part-time job...................................................................10,000
During 2014, Gus had no taxable income. In 2015, Gus had taxable income of $21,100 computed as follows:
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a. What is Gus's 2016 NOL?
b. Determine Gus's recomputed taxable income for 2015.
c. Determine the amount of Gus's 2016 NOL to be carried forward to 2017.
Net business income Interest income Adjusted gross income Less: Itemized deductions Charitable contributions of $40,000, limited to 50% of AGI Medical expenses of $8,100, limited to the amount in excess of 10% of AGI ($8,100 $6,200) Total itemized deductions Exemptions (2 x $4,000) Taxable income $ 60,000 2,000 $ 62,000 $31,000 1,900 (32,900) (8,000) $ 21,100
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a Business receipts 276000 Less Business expenses 320000 Net business loss 44000 Salary 10000 Ordinary non business income 8000 Non business shortterm ... View full answer
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