No modification for nonbusiness deductions is made on a NOL as long as:
A) The NOL is carried forward to a future year.
B) Real estate tax paid is the only deduction shown on the return.
C) The taxpayer uses the standard deduction.
D) Nonbusiness income plus excess nonbusiness capital gains exceed nonbusiness deductions.
No modification for nonbusiness deductions is made on a NOL as long as:
A) The NOL is carried forward to a future year.
B) Real estate tax paid is the only deduction shown on the return.
C) The taxpayer uses the standard deduction.
D) Nonbusiness income plus excess nonbusiness capital gains exceed nonbusiness deductions.
Unlock all answers
Related questions
Jeremy earned $140,000 in salary and $1,000 in interest income during the year. Jeremy has two qualifying dependent children who live with him. He qualifies to file as head of household and has $14,500 in itemized deductions. Neither of his dependents qualifies for the child tax credit. (use the tax rate schedules.). (Do not round intermediate calculations. Round "Income tax liability" to 2 decimal places.)
Tax Rate Schedule: https://ezto-cf-media.mheducation.com/Media/Connect_Production/bne/accounting/spilker_9e/taxrateschedulea.jpg
a:. Use the 2017 tax rate schedules to determine Jeremyâs taxes due.
| |||||||||||||||||||||||||||||||||||||||||
b. Assume that in addition to the original facts, Jeremy has a long-term capital gain of $6,500. What is Jeremyâs tax liability including the tax on the capital gain?
| ||||||||||||||||||||||||||||||||||||||||
c. Assume the original facts except that Jeremy had only $3,500 in itemized deductions. What is Jeremyâs total income tax liability?
DescriptionAmount
(1)Gross income$141,000
(2)For AGI deductions0
(3)Adjusted gross income
$141,000
(4)Standard deduction
(5)Itemized deductions
(6)
(7)Personal and dependency exemptions
(8)Taxable income
income tax liability
1. What is theamount of Taxpayerâs interest deduction that would be allowable forthe current year assuming Taxpayer incurred the following, andassuming that Taxpayer itemizes deductions?
Interest on loan used to purchase land for investment (assume nonet investment income) | $18,000 |
Interest on loan used to purchase primary personal residence | $6,000 |
Interest on loan used to purchase boat | $500 |
Interest on loan to purchase 100 shares of General Auto | $3,000 |
a. $27,000
b. $6,000
c. $27,500
d. $21,000
2. On April 10, 2018Cathy closed on the purchase of a house (her principal residence)that cost $2,000,000, paying $500,000 down and borrowing the other$1,500,000 at 5% interest. If her interest expense for the year is$75,000, what amount may Cathy deduct for interest expense?
a. $75,000
b. $50,000
c. $37,500
d. $0
3. Assume thefollowing taxes are paid by the Taxpayer in 2018: real estate taxeson Taxpayerâs home in the amount of $2,000; state income taxes inthe amount of $4,500; city sales tax in the amount of $2,800; statesales taxes of $210 paid while on vacation to states other than thestate in which Taxpayer resides; state gasoline tax (personal useof automobile) in the amount of $400; dog licenses in the amount of$20; and real estate taxes on the home of and owned by Taxpayerâsmother in the amount of $1,450. Assuming also that Taxpayeritemizes deductions on Taxpayerâs 2018 Federal income tax return,the allowable amount of Taxpayerâs deduction for taxes is which ofthe following?
a. $9,960
b. $6,500
c. $9,510
d. $10,380
4. Taxpayerpurchased a personal residence in 2017 for $266,000. The fairmarket value of the residence was $280,000 when it was damaged by aflood on June 10, 2018 that resulted from not turning off the bathwater before leaving for vacation. The fair market value of theresidence after the flood was $240,000 and insurance proceedstotaled $15,000. What is the net amount of casualty loss Taxpayermay deduct for 2018 as an itemized deduction if Taxpayerâs adjustedgross income is $120,000?
a. 0
b. $25,000
c. $24,900
d. $8,500
e. $12,900
