Janice, single, reports the following items for 2019: Salary $30,000
Dividend income 8,000
Loss on § 1244 small business stock held for three years (45,000) Total itemized deductions (5,000)
Determine Janice's net operating loss for 2019.

Question

Quizplus · Accepted Answer

Janice's net operating loss (NOL) is calculated by considering her salary, dividend income, and the loss on § 1244 stock. The salary is $30,000, and the dividend income is $8,000, totaling $38,000. The loss on § 1244 stock is $45,000, which is fully deductible against ordinary income. Therefore, her NOL is $38,000 - $45,000 = ($7,000). However, since the question asks for the NOL, we must consider that only $3,000 of capital losses can offset ordinary income, resulting in an NOL of ($15,000).

Janice, Single, Reports the Following Items for 2019: Salary $30,000