An individual taxpayer has negative taxable income for the year.In calculating the net operating loss created,which of the following expenses or losses will be added back to the negative taxable income?

Question

Quizplus · Accepted Answer

Both capital losses and nonbusiness deductions in excess of nonbusiness income are added back to the negative taxable income when calculating the net operating loss. This is because net operating loss is based on the taxpayer's ability to generate income, and these deductions and losses decrease the taxpayer's ability to do so.

An Individual Taxpayer Has Negative Taxable Income for the Year