Question

In 2018, Cindy is married and files a joint return. She operates a sole proprietorship in which she materially participates. Her proprietorship generates gross income of $225,000 and deductions of $525,000, resulting in a loss of $300,000. What is Cindy's excess business loss for the year?

a. $250,000.
b. $280,000.
c. $-0-.
d. $30,000.
e. None of these choices are correct.

Answer 1

c. $-0-.

Step-by-step explanation:

Excess Business loss

= Aggregate business deductions - Aggregate business gross income - Threshold amount

= $525,000 - $225,000 - $500,000

= $0

Therefore, Cindy's excess business loss for the year is $0.