Answer:
Based on these transactions, to arrive at the NOL, Phillis and Trey's taxable income must be adjusted by $21,000.
Explanation:
From the provided data we have;
nonbusiness capital gains = $4,800
nonbusiness capital losses = $2,300
interest income, and no itemized deductions = $500
The standard deduction for married filing jointly = $24,000
To arrive at Net Operating Loss = standard deduction for married - (interest income + (nonbusiness capital gains - nonbusiness capital losses))
NOL = $24,000 - [500 + (4800 -2300)]
= 24000 - (500 + 2500)
= 24000 - 3000
= $21,000
Based on these transactions, to arrive at the NOL, Phillis and Trey's taxable income must be adjusted by $21,000.
