During 2022, Leisel, a single taxpayer, operates a sole proprietorship in which she materially participates. Her proprietorship generates gross income of $142,000 and deductions of $420,000, resulting in a loss of $278,000. The large deductions are due to the acquisition of equipment and the use of immediate expense and additional first-year depreciation to deduct all of the acquisitions. Can Leisel use all of this loss to offset other income she has? She may use $ 250,000 X of the $278,000 proprietorship business loss to offset nonbusiness income an excess business loss of $ 28,000 X. The excess business loss is treated as part of her NOL carryforward ✓. Leisel has
During 2022, Leisel, a single taxpayer, operates a sole proprietorship in which she materially participates. Her proprietorship generates gross income of $142,000 and deductions of $420,000, resulting in a loss of $278,000. The large deductions are due to the acquisition of equipment and the use of immediate expense and additional first-year depreciation to deduct all of the acquisitions. Can Leisel use all of this loss to offset other income she has? She may use $ 250,000 X of the $278,000 proprietorship business loss to offset nonbusiness income an excess business loss of $ 28,000 X. The excess business loss is treated as part of her NOL carryforward ✓. Leisel has
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:During 2022, Leisel, a single taxpayer, operates a sole proprietorship in which she materially participates. Her proprietorship generates
gross income of $142,000 and deductions of $420,000, resulting in a loss of $278,000. The large deductions are due to the acquisition
of equipment and the use of immediate expense and additional first-year depreciation to deduct all of the acquisitions. Can Leisel use
all of this loss to offset other income she has?
She may use $
an excess business loss of $
250,000 X of the $278,000 proprietorship business loss to offset nonbusiness income
28,000 X. The excess business loss is treated as part of her NOL carryforward
Leisel has
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