Question

During 2018, Leisel, a single taxpayer, operates a sole proprietorship in which she materially participates. Her proprietorship generates gross income of $142,000 and deductions of $420,000, resulting is a loss of $278,000. The large deductions are due to the acquisition of equipment and the use of immediate expense and additional first-year depreciation to deduct all of the acquisitions. Can Leisel use all of this loss to offset other income she has?

Leisel has an excess business loss of $ _________. She may use $ ________ of the $278,000 proprietorship business loss to offset nonbusiness income .

Answer 1

255,000

23,000

Step-by-step explanation:

Answer 2

Bussines loss is 278.000 and 250.000 is the amount she will use.

Step-by-step explanation:

Leisel has an excess business loss of $ 278000. She may use $ 250000 of the $278,000 proprietorship business loss to offset nonbusiness income .

The TCJA limits deductions of “excess business losses” by individual business owners. Individual taxpayers may deduct no more then $250,000.