Soong, single and age 32, had the following items for the tax year 2015: a. Dete

Question

Soong, single and age 32, had the following items for the tax year 2015:

a. Determine Soong’s NOL for 2015

b. Assuming that Soong had taxable income for each of the last five years, determine the carryback year to which the 2015 NOL should be applied

Salary $      30,000 Interest income from US government bonds $        2,000 Dividends from a foreign corporation $            500 Sale of small business §1244 stock on October 20, 2015 for $20,000. The stock had been acquired two years earlier $65,000 $      20,000 Business bad debt $        4,000 Nonbusiness bad debt $        5,000 Sale of small business §1244 stock on November 12, 2015, for $4,000. The stock had been acquired on June 5, 2015, for $800 $        4,000 Total itemized deductions of $25,000 (no casualty or theft) $      25,000

Explanation / Answer

b) The taxable year 2014 and 2013 on which NOL of 2015 can be applies.

Rule A net opearting loss for a taxable year is shall be a net operating loss carryback to each of the 2 taxable years preceding the taxable year of such loss

Salary $      30,000 Interest income from US government bonds $        2,000 Dividends from a foreign corporation $            500 Short Term Capital Loss-Nonbusiness bad debt will be deducted upto $3200 of short term captal gain(4000-800) -3200 Business bad debt -4000 Itemwise Deduction assuming it is not personal exemption -25000 Net Operating Loss $ -32200

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