Question

Phillis and Trey are married and file a joint tax return. For 2018, they have $4,800 of nonbusiness capital gains, $2,300 of nonbusiness capital losses, $500 of interest income, and no itemized deductions. The standard deduction for married filing jointly is $24,000. Based on these transactions, to arrive at the NOL, Phillis and Trey's taxable income must be adjusted by $ _______.

Answer 1

$21,000

Step-by-step explanation:

NOL, Phillis and Trey's taxable income must be adjusted by:

= Standard deduction - (Interest income + Net non business capital gain)

= $24,000 - [$500 + ($4,800 - $2,300)]

= $24,000 - ($500 + $2,500)

= $24,000 - $3,000

= $21,000

Therefore, the NOL, Phillis and Trey's taxable income must be adjusted by $21,000.