Question

For 2019, a taxpayer and spouse have $1,600 of nonbusiness capital gains, $1,000 of nonbusiness capital losses, $13,000 of interest income, $12,000 of itemized deductions (none of which are personal casualty and theft losses), $3,000 of business capital losses, and $1,000 of business capital gains. How much must they add back to taxable income to calculate the NOL?

Answer 1

Answer:

$400

Explanation:

To calculate the amount of money they need to add to taxable income to calculate the net operating loss (NOL):

= business capital losses - [business capital gains + (nonbusiness income + net nonbusiness capital gains - nonbusiness deductions)]

= $3,000 - [$1,000 + ($13,000 + $600 - $12,000)] = $3,000 - ($1,000 + $1,600) = $3,000 - $2,600 = $400