Net Operating Loss. During the year, Karen, a single taxpayer, reports the follo

Question

Net Operating Loss. During the year, Karen, a single taxpayer, reports the following
income and expense items relating to her interior design business:
Revenues $52,000
Cost of goods sold 41,000
Advertising 3,300
Office supplies 1,700
Rent 13,800
Contract labor 28,000
Karen also worked part-time during the year, earning $13,500. She reports a long-term
capital gain of $4,200, and a short-term capital loss of $3,800. Her itemized deductions
total $5,200.
a. What is Karen’s taxable income or loss for the year?
b. What is Karen’s NOL for the year?

Explanation / Answer

Income Statement Revenue 52,000 Cost of Goods Sold (41000) Gross Profit: 11,000 Expenses:46,800 Advertising 3300 Supplies expense 1700 Rent 13800 Salary (Labor) 28000 Operating Profit (Loss): ($35,800)* Answer to question #2 Other Gains and Revenues Wages: 13,500 Capital Gain: 4,200 Other Losses or Expenses Capital Loss 3,800 Net Income: (21,900) Tax Deductions: 5,200 Taxable Income: (27,100)* Answer to question 1 Please RATE me! Any questions, comment.

Related Questions

Navigate

• Browse (All)
• Browse N
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.