Xinran, who is married and files a joint return, owns a grocery store. In 2022, his gross sales were $276,000 and his operating expenses were $320,000. Other items on his 2022 return were as follows: Nonbusiness capital gains (short-term) $20,000 Nonbusiness capital losses (long-term) 9,000 Itemized deductions 18,000 Ordinary nonbusiness income 8,000 Salary from part-time job (spouse) 10,000 In 2023, Xinran provides the following information: Net business income $60,000 Salary (spouse) 25,000 Interest income 2,000 Adjusted gross income $87,000 Less: Itemized deductions* Charitable contributions (cash) $35,000 Medical expenses of $6,925 [limited to the amount in excess of 7.5% of AGI ($6,925 – $6,525)] 400 Total itemized deductions $35,400 * The 2022 married filing jointly standard deduction is $25,900; Xinran's itemized deductions will exceed the 2023 standard deduction (after adjustment for inflation). Enter all amounts as positive numbers. However, use the minus sign to indicate a loss. If an amount is zero, enter "0". Question Content Area a. Compute Xinran's taxable income (or loss) for 2022? 2022 Net business income/loss from grocery store $fill in the blank 595a98062fbcfff_1 Salary fill in the blank 595a98062fbcfff_2 Ordinary nonbusiness income fill in the blank 595a98062fbcfff_3 fill in the blank 595a98062fbcfff_5 Adjusted gross income/loss $fill in the blank 595a98062fbcfff_6 Less: MFJ standard deduction fill in the blank 595a98062fbcfff_7 Less: Deduction for qualified business income fill in the blank 595a98062fbcfff_8 $fill in the blank 595a98062fbcfff_10 Question Content Area b. Compute Xinran's NOL for 2022. $fill in the blank 6e87f108d063020_1 Question Content Area c. Determine Xinran's taxable income for 2023. 2023 (1) Determine taxable income before application of the NOL: Net business income $fill in the blank ebd132065fae03e_1 Salary fill in the blank ebd132065fae03e_2 Interest income fill in the blank ebd132065fae03e_3 Adjusted gross income $fill in the blank ebd132065fae03e_4 Less: Itemized deductions: fill in the blank ebd132065fae03e_5 Less: Deduction for qualified business income: Grocery store fill in the blank ebd132065fae03e_6 Taxable income $fill in the blank ebd132065fae03e_7 (2) Determine the NOL deduction: 1. The NOL carryforward $fill in the blank ebd132065fae03e_8, or 2. 80% of taxable income computed in step 1: $fill in the blank ebd132065fae03e_9 (3) Determine final taxable income: Net business income $fill in the blank ebd132065fae03e_10 Salary fill in the blank ebd132065fae03e_11 Interest income fill in the blank ebd132065fae03e_12 NOL deduction fill in the blank ebd132065fae03e_13 Adjusted gross income $fill in the blank ebd132065fae03e_14 Less: Itemized deductions Charitable contributions $fill in the blank ebd132065fae03e_15 Medical expenses fill in the blank ebd132065fae03e_16 fill in the blank ebd132065fae03e_17 Less: Deduction for qualified business income: Grocery store $fill in the blank ebd132065fae03e_18 Taxable income $fill in the blank ebd132065fae03e_19
Xinran, who is married and files a joint return, owns a grocery store. In 2022, his gross sales were $276,000 and his operating expenses were $320,000. Other items on his 2022 return were as follows: Nonbusiness capital gains (short-term) $20,000 Nonbusiness capital losses (long-term) 9,000 Itemized deductions 18,000 Ordinary nonbusiness income 8,000 Salary from part-time job (spouse) 10,000 In 2023, Xinran provides the following information: Net business income $60,000 Salary (spouse) 25,000 Interest income 2,000 Adjusted gross income $87,000 Less: Itemized deductions* Charitable contributions (cash) $35,000 Medical expenses of $6,925 [limited to the amount in excess of 7.5% of AGI ($6,925 – $6,525)] 400 Total itemized deductions $35,400 * The 2022 married filing jointly standard deduction is $25,900; Xinran's itemized deductions will exceed the 2023 standard deduction (after adjustment for inflation). Enter all amounts as positive numbers. However, use the minus sign to indicate a loss. If an amount is zero, enter "0". Question Content Area a. Compute Xinran's taxable income (or loss) for 2022? 2022 Net business income/loss from grocery store $fill in the blank 595a98062fbcfff_1 Salary fill in the blank 595a98062fbcfff_2 Ordinary nonbusiness income fill in the blank 595a98062fbcfff_3 fill in the blank 595a98062fbcfff_5 Adjusted gross income/loss $fill in the blank 595a98062fbcfff_6 Less: MFJ standard deduction fill in the blank 595a98062fbcfff_7 Less: Deduction for qualified business income fill in the blank 595a98062fbcfff_8 $fill in the blank 595a98062fbcfff_10 Question Content Area b. Compute Xinran's NOL for 2022. $fill in the blank 6e87f108d063020_1 Question Content Area c. Determine Xinran's taxable income for 2023. 2023 (1) Determine taxable income before application of the NOL: Net business income $fill in the blank ebd132065fae03e_1 Salary fill in the blank ebd132065fae03e_2 Interest income fill in the blank ebd132065fae03e_3 Adjusted gross income $fill in the blank ebd132065fae03e_4 Less: Itemized deductions: fill in the blank ebd132065fae03e_5 Less: Deduction for qualified business income: Grocery store fill in the blank ebd132065fae03e_6 Taxable income $fill in the blank ebd132065fae03e_7 (2) Determine the NOL deduction: 1. The NOL carryforward $fill in the blank ebd132065fae03e_8, or 2. 80% of taxable income computed in step 1: $fill in the blank ebd132065fae03e_9 (3) Determine final taxable income: Net business income $fill in the blank ebd132065fae03e_10 Salary fill in the blank ebd132065fae03e_11 Interest income fill in the blank ebd132065fae03e_12 NOL deduction fill in the blank ebd132065fae03e_13 Adjusted gross income $fill in the blank ebd132065fae03e_14 Less: Itemized deductions Charitable contributions $fill in the blank ebd132065fae03e_15 Medical expenses fill in the blank ebd132065fae03e_16 fill in the blank ebd132065fae03e_17 Less: Deduction for qualified business income: Grocery store $fill in the blank ebd132065fae03e_18 Taxable income $fill in the blank ebd132065fae03e_19
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Xinran, who is married and files a joint return, owns a grocery store. In 2022, his gross sales were $276,000 and his operating expenses were $320,000. Other items on his 2022 return were as follows:
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In 2023, Xinran provides the following information:
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* The 2022 married filing jointly standard deduction is $25,900; Xinran's itemized deductions will exceed the 2023 standard deduction (after adjustment for inflation). |
Enter all amounts as positive numbers. However, use the minus sign to indicate a loss. If an amount is zero, enter "0".
Question Content Area
a. Compute Xinran's taxable income (or loss) for 2022?
|
Question Content Area
b. Compute Xinran's NOL for 2022.
$fill in the blank 6e87f108d063020_1
Question Content Area
c. Determine Xinran's taxable income for 2023.
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