Jack, Age 30 and Married with No Dependents, Is a Self-Employed

question 51

Multiple Choice

Jack, age 30 and married with no dependents, is a self-employed individual. For 2019, his self-employed business sustained a net loss from operations of $10,000 from operations . The following additional information was obtained from his personal records for the year: $\begin{array}{lr}\text { Nonbusiness long-term capital gain } & \$ 2,000 \\\text { Interest income } & 6,000 \\\text { Itemized deductions-consisting of taxes and interest } & (26,000) \end{array}$ Based on this information, what is Jack's net operating loss for 2019 if he and his spouse file a joint return?

• A) ($2,000)
• B) ($8,000)
• C) ($10,000)
• D) ($25,000)
• E) ($28,000)

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Definitions:

Accounts Payable

Liabilities of a business that are due to vendors or suppliers for goods or services received that have not yet been paid for.

Cash Payments Journal

A financial journal that records all cash outflows or payments made by a business.

Subsidiary Ledger

A ledger containing all the details of a general ledger account, allowing for more detailed information and analysis of that account.

Cash Receipts Journal

A specialized accounting journal used to record all cash inflow transactions.