Margaret, a married taxpayer filing a joint return, engaged in two business activities this year. Business...

Margaret, a married taxpayer filing a joint return, engaged in two business activities this year. Business A earned $470,000 of profit. Business B incurred a loss of $(995,000). Required: How much of Margaret's net business loss is not currently deductible?

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Expert Solution

Answer :-

$25,000

Explanation:

The total business loss from Margaret's joint businesses is $525,000 ($995,000 - $470,000) with a maximum deduction for married taxpayer filling jointly at $500,000 whereas a single taxpayer is deducted a maximum of $250,000. The treatment of losses were defined in 2018.

Therefore,

Margaret's net business loss not currently deductible (or the excess) = Maximum deduction for married taxpayer - total business loss of Margret

= $5,00,000 - $5,25,000

= -$25,000

ekkarill92 answered 2 years ago

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