Money Corporation has the following income and expenses for the tax year: $\begin{array}{|l|l|}
\hline \text { Gross profit on sales: }&\$200,000\
\hline \text { Expenses: } & 700,000 \
\hline \text { Dividends received from less-than-20\%-owned domestic } & \
\text { corporations: } & 20,000\\hline
\end{array}$ What is Money's net operating loss?

Question

Quizplus · Accepted Answer

Money Corporation's net operating loss is calculated by subtracting total expenses from gross profit and adding dividends received. The calculation is: $200,000 (gross profit) - $700,000 (expenses) + $20,000 (dividends) = -$480,000. However, the dividends received deduction (50% of $20,000) is $10,000, so the net operating loss is $490,000.

Money Corporation Has the Following Income and Expenses for the Tax