sorry, no idea if i'm in the right board...
got a question about net operating losses (NOL).
Gus, who is married and files a joint return, owns a grocery store.
In 2008, his gross sales were $276,000, and operating expenses were $320,000.
Other items on his 2008 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 the year 2006, Gus had no taxable income. In 2007, Gus had taxable
income of $22,300 computed as follows:
net business income $60,000
interest income 2,000
_________
adjusted gross income $62,000
less: itemized deductions
charitable contributions of $40,000,
limited to 50% of AGI $31,000
medical expenses of $6,550,
limited to the amount of 7.5% of AGI 1,900
________
total itemized deductions (32,900)
exemptions (2 x $3,400) (6,800)
_________
taxable income $22,300
=========
a. What is Gus's 2008 NOL?
b. Determine Gus's recomputed taxable income for 2007.
c. Determine the amount of Gus's 2008 NOL to be carried forward to 2009.
Here is my calculation:
a.
gross income $276,000
less: business expenses (320,000) ($44,000)
___________
salary from part-time job 10,000
nonbusiness short-term capital gain 11,000
ordinary nonbusiness income 8,000
__________
AGI (15,000)
less: itemized deduction (18,000)
exemptions (7,000)
__________
taxable income ($40,000)
==========
NOL:
taxable income ($40,000)
add: exemptions 7,000
excess of nonbusiness deduction
over nonbusiness income
total itemized deductions $18,000
less: nonbusiness capital gain (11,000) 7,000
__________ __________
net operating losses ($26,000)
==========
b.
AGI $62,000
less: net operating losses (26,000)
___________
recomputed AGI 36,000
less: itemized deductions
charitable contributions $31,000
medical expenses
($6550 - $36,000 x 7.5%) 3,850
__________
total itemized deduction (34,850)
exemptions (6,800)
_____________
taxable income $0
=============
c.
AGI ($15,000)
itemized deductions (18,000)
__________
modified taxable income ($33,000)
NOL (26,000)
__________
NOL to carry forward ($59,000)
==========
truly appreciate if someone can correct me......
--
got a question about net operating losses (NOL).
Gus, who is married and files a joint return, owns a grocery store.
In 2008, his gross sales were $276,000, and operating expenses were $320,000.
Other items on his 2008 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 the year 2006, Gus had no taxable income. In 2007, Gus had taxable
income of $22,300 computed as follows:
net business income $60,000
interest income 2,000
_________
adjusted gross income $62,000
less: itemized deductions
charitable contributions of $40,000,
limited to 50% of AGI $31,000
medical expenses of $6,550,
limited to the amount of 7.5% of AGI 1,900
________
total itemized deductions (32,900)
exemptions (2 x $3,400) (6,800)
_________
taxable income $22,300
=========
a. What is Gus's 2008 NOL?
b. Determine Gus's recomputed taxable income for 2007.
c. Determine the amount of Gus's 2008 NOL to be carried forward to 2009.
Here is my calculation:
a.
gross income $276,000
less: business expenses (320,000) ($44,000)
___________
salary from part-time job 10,000
nonbusiness short-term capital gain 11,000
ordinary nonbusiness income 8,000
__________
AGI (15,000)
less: itemized deduction (18,000)
exemptions (7,000)
__________
taxable income ($40,000)
==========
NOL:
taxable income ($40,000)
add: exemptions 7,000
excess of nonbusiness deduction
over nonbusiness income
total itemized deductions $18,000
less: nonbusiness capital gain (11,000) 7,000
__________ __________
net operating losses ($26,000)
==========
b.
AGI $62,000
less: net operating losses (26,000)
___________
recomputed AGI 36,000
less: itemized deductions
charitable contributions $31,000
medical expenses
($6550 - $36,000 x 7.5%) 3,850
__________
total itemized deduction (34,850)
exemptions (6,800)
_____________
taxable income $0
=============
c.
AGI ($15,000)
itemized deductions (18,000)
__________
modified taxable income ($33,000)
NOL (26,000)
__________
NOL to carry forward ($59,000)
==========
truly appreciate if someone can correct me......
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