a. What is Xinran's 2021 NOL? b. Determine Xinran's taxable income for 2022.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![44. LO.7 Xinran, who is married and files a joint return, owns a grocery store. In 2021
his gross sales were $276,000, and operating expenses were $320,000. Other
items on his 2021 return were as follows:
Nonbusiness capital gains (short term)
Nonbusiness capital losses (long term)
Itemized deductions
Ordinary nonbusiness income
Salary from part-time job (spouse)
In 2022, Xinran provides the following information:
Net business income
Salary (spouse)
Interest income
Adjusted gross income
Itemized deductions*
Charitable contributions (cash)
Medical expenses of $6,925 [limited to the amount in
excess of 7.5% of AGI ($6,925 - $6,525)]
Total itemized deductions
$20,000
9,000
18,000
a. What is Xinran's 2021 NOL?
b. Determine Xinran's taxable income for 2022.
8,000
10,000
$35,000
400
$60,000
25,000
2,000
$87,000
$35,400
*The 2021 married filing jointly standard deduction is $25,100; Xinran's itemized deductions will exceed the 2022
standard deduction (after adjustment for inflation).](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F33acded1-59cb-4b02-97f4-595245a35fc5%2Facaa30e7-808e-4af4-b570-6d1e40504eb5%2Fp7nmt8o_processed.png&w=3840&q=75)
Transcribed Image Text:44. LO.7 Xinran, who is married and files a joint return, owns a grocery store. In 2021
his gross sales were $276,000, and operating expenses were $320,000. Other
items on his 2021 return were as follows:
Nonbusiness capital gains (short term)
Nonbusiness capital losses (long term)
Itemized deductions
Ordinary nonbusiness income
Salary from part-time job (spouse)
In 2022, Xinran provides the following information:
Net business income
Salary (spouse)
Interest income
Adjusted gross income
Itemized deductions*
Charitable contributions (cash)
Medical expenses of $6,925 [limited to the amount in
excess of 7.5% of AGI ($6,925 - $6,525)]
Total itemized deductions
$20,000
9,000
18,000
a. What is Xinran's 2021 NOL?
b. Determine Xinran's taxable income for 2022.
8,000
10,000
$35,000
400
$60,000
25,000
2,000
$87,000
$35,400
*The 2021 married filing jointly standard deduction is $25,100; Xinran's itemized deductions will exceed the 2022
standard deduction (after adjustment for inflation).
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