Javier incurred a $40,000 net operating loss in 2019.In 2020,he earned $35,000 of taxable income.Javier will be able to take an NOL deduction in 2020 of
A)$35,000.
B)$40,000.
C)$28,000.
D)$26,250.

Question

Quizplus · Accepted Answer

The NOL deduction is limited to $2,500 plus 80% of taxable income. Javier's taxable income in 2020 is $35,000, so his NOL deduction is limited to $2,500 + 0.80 * $35,000 = $28,000.

Javier Incurred a $40,000 Net Operating Loss in 2019