Jack,age 30 and married with no dependents,is a self-employed individual.For 2016,his self-employed business sustained a net loss from operations of $10,000.The following additional information was obtained from his personal records for the year:
Nonbusiness long-term capital gain
$ 2,000
Interest income
6,000
Itemized deductions-consisting of taxes and interest
(12,000)

Based on the above information,what is Jack's net operating loss for 2016 if he and his spouse file a joint return?

Question

Jack,age 30 and married with no dependents,is a self-employed individual.For 2016,his self-employed business sustained a net loss from operations of $10,000.The following additional information was obtained from his personal records for the year:
Nonbusiness long-term capital gain
$ 2,000
Interest income
6,000
Itemized deductions-consisting of taxes and interest
(12,000)
​
Based on the above information,what is Jack's net operating loss for 2016 if he and his spouse file a joint return?

Quizplus · Accepted Answer

The net operating loss for self-employed individuals is calculated differently than for other taxpayers. Nonbusiness income, such as long-term capital gains and interest income, is taken into account in the calculation of the net operating loss.
Therefore, Jack's net operating loss for 2016 would be equal to his business loss of $10,000 since his nonbusiness income and deductions do not affect the calculation of his net operating loss.

Jack,age 30 and Married with No Dependents,is a Self-Employed Individual