Max,a single taxpayer,has a $270,000 loss from his sole proprietorship.How much of this loss is deductible after considering the excess business loss rules?

Question

Quizplus · Accepted Answer

The excess business loss rule limits the amount of business losses that can be deducted to $250,000 ($500,000 for married taxpayers filing jointly) for taxable years 2018-2025. Since Max is a single taxpayer, he can only deduct up to $250,000 of his $270,000 loss. The remaining $20,000 loss can be carried forward to future tax years. Therefore, the correct answer is B) $250,000.

Max,a Single Taxpayer,has a $270,000 Loss from His Sole Proprietorship