Question

You are finishing your 3rd year in business with $535,000 of gross income and $275,000 in deductions. Two years ago, you had a net loss of $93,000 and last year, you had a net loss of $52,000. Calculate your taxable income for this year.

Answer 1

Taxable Income for this year is $115,000

Step-by-step explanation:

Particulars Amount ($)

Gross income of 3rd year 535,000

Less: Net loss of last years (145,000)

Gross Income 390,000

Less: Deductions (275,000)

Taxable Income $115,000

Working

Net loss of last years = $93,000 + $52,000

= $145,000