Elizabeth reports the following items for the current year: $\begin{array}{lr}
\text { Nonbusiness capital gains }&\$5,000\
\text { Nonbusiness capital losses } & (3,000) \
\text { Interest income } & 3,000
\end{array}$ (27,000) In calculating Elizabeth's net operating loss and with respect to these amounts only, what amount must be added back to taxable income (loss)?

Question

Quizplus · Accepted Answer

Nonbusiness capital losses can only offset nonbusiness capital gains. Elizabeth has $5,000 in nonbusiness capital gains and $3,000 in nonbusiness capital losses, resulting in a net gain of $2,000. This $2,000 must be added back to taxable income when calculating the net operating loss.

Elizabeth Reports the Following Items for the Current Year (27,000) in Calculating Elizabeth's Net Operating Loss and with Respect