1. sokroblem 4-13let Operating Losses (LO 4.9)Tyler, a single taxpayer, generates business income of $3,000 in 2016. In 2017, he generates an NOL of $2,000. In 2018, he incurs another NOL of$5,000. In 2019, he generates a modest business income of $6,000 and then in 2020, the COVID-19 pandemic results in an NOL of $13,000. In 2021,Tyler's business generates income of $13,000. Assume that in all years, Tyler adopts the NOL treatment that results in the earliest and greatest refund.Provide a chronological analysis of Tyler's treatment of NOLS through 2021 and report any NOL carryforward into 2022.In 2017, Tylerhis $2,000 NOL against hisE income ieaving sof 2016 income.In 2018, Tylerthe NOL toin 2019, Tyler can offsetof his 2019 income with the- NOL and he has a scarryforward fromIn 2020, the COVID-19 provisions allows him to carrybacktoHe can now use all of the remaining $2018loss against the 2019 income and then can use another sfrom 2020 may be carried forward into 2021. After 2020, NOLS are subject to the 80% income limitation. Tyler will be able to use Sand have a sof 2020 NOL against the remaining 2019 income. The remaining sNOLin 2021NOL to carryforward into 2022. Problem 4-10Rental Income and Expenses (LO 4.7)Sherry rents her vacation home for 6 months and lives in it for 6 months during the year. Her gross rental income during the year is $6,000. Total realestate taxes for the home are $2,200, and interest on the home mortgage is $4,000. Annual utilities and maintenance expenses total $2,000, anddepreciation expense is $4,500.Calculate Sherry's deductible depreciation, the net income or loss fram the vacation home, and the loss carryforward, if any.Base allocation on number months, rather than days. If your answer value is zero, enter "0".Rental incomeExpenses:Real estate taxesMortgage interestUtilities and maintenanceDepreciationNet rental incomeLoss carried forward to 2022

By extracting the information: Business Income of 2016=$3,000 NOL for the year 2017= ($2,000) NOL…

Answered: 5,000. In 2019, he ger yler's business…

Business

Accounting

5,000. In 2019, he ger yler's business generat Provide a chronological

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Capital Gain

Any capital asset when sold can give the seller a higher or lower price from its purchase price leading to a capital gain or capital loss. The time period of holding an asset is decided based on if it is a long term or short-term capital gain. On that basis, the rate of taxation is decided if it is 20%, 15% or according to the tax brackets. The rate of taxation differs in the case of equity or debt, whether long or short term. The capital gain can be adjusted from capital loss to arrive at a net capital gain. The amount of gains and the exemption has to be reported in the tax return filed in the financial year in which the asset was transferred. The tax return can be filed quarterly, monthly, semi-annually or annually.

Question

sok
roblem 4-13
let Operating Losses (LO 4.9)
Tyler, a single taxpayer, generates business income of $3,000 in 2016. In 2017, he generates an NOL of $2,000. In 2018, he incurs another NOL of
$5,000. In 2019, he generates a modest business income of $6,000 and then in 2020, the COVID-19 pandemic results in an NOL of $13,000. In 2021,
Tyler's business generates income of $13,000. Assume that in all years, Tyler adopts the NOL treatment that results in the earliest and greatest refund.
Provide a chronological analysis of Tyler's treatment of NOLS through 2021 and report any NOL carryforward into 2022.
In 2017, Tyler
his $2,000 NOL against his
E income ieaving s
of 2016 income.
In 2018, Tyler
the NOL to
in 2019, Tyler can offset
of his 2019 income with the
- NOL and he has a s
carryforward from
In 2020, the COVID-19 provisions allows him to carryback
to
He can now use all of the remaining $
2018
loss against the 2019 income and then can use another s
from 2020 may be carried forward into 2021. After 2020, NOLS are subject to the 80% income limitation. Tyler will be able to use S
and have a s
of 2020 NOL against the remaining 2019 income. The remaining s
NOL
in 2021
NOL to carryforward into 2022.

Problem 4-10
Rental Income and Expenses (LO 4.7)
Sherry rents her vacation home for 6 months and lives in it for 6 months during the year. Her gross rental income during the year is $6,000. Total real
estate taxes for the home are $2,200, and interest on the home mortgage is $4,000. Annual utilities and maintenance expenses total $2,000, and
depreciation expense is $4,500.
Calculate Sherry's deductible depreciation, the net income or loss fram the vacation home, and the loss carryforward, if any.
Base allocation on number months, rather than days. If your answer value is zero, enter "0".
Rental income
Expenses:
Real estate taxes
Mortgage interest
Utilities and maintenance
Depreciation
Net rental income
Loss carried forward to 2022

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